Many different types of businesses and organisations have fleets made up of vans, taxis, buses or other forms of transport, and getting appropriate cover for all of the vehicles and drivers can be difficult and expensive. Fleet insurance is a type of motor vehicle liability insurance that covers vehicles used by businesses, public authorities and other enterprises. It can be expensive, but there are ways to reduce the cost. In this article, we’ll cover what fleet insurance is, how it can help your business by providing comprehensive coverage for all your vehicles, and some useful tips that may potentially help you lower the cost.
What is fleet insurance?
Fleet insurance provides complete commercial vehicle coverage in one package which helps keep premiums down while ensuring there are no gaps in protection. This type of policy covers all vehicles used within a single company including taxis, vans and trucks, delivery motorbikes, and any other type of commercial vehicle. Fleet is designed to help all types of businesses, and provide flexible options to suit even the most unique policies at affordable rates. By bundling together different types of commercial vehicle coverage under one policy, it can help to reduce excesses and premium costs too.
What does fleet insurance cover?
All business owners know how expensive it can be to insure a fleet of vehicles, fleet insurance policies typically provide high levels of cover along with broader protections than standard commercial vehicle policies. This includes all new risks which may only come into existence during your policy term (for example, if you hire new drivers) as well as any pre-existing issues that are not normally covered under normal commercial vehicle policies (such as vehicle manufacturing defects). Another bonus is that most fleet insurers offer an ‘all risk’ option which will provide third party property damage and legal liability cover. This means that you are protected from any claims made by third parties against your company for damage to their property, or injury and damage caused as a result of an accident involving one of your vehicles. This is not normally the case with standard commercial vehicle insurance policies so it is a major bonus.
What are the different types of fleet insurance?
There are a number of different types of fleet insurance available, each catering to specific business requirements. In the UK there are two main categories: public hire and private hire. Additionally, haulage covers larger commercial vehicles such as lorries and vans delivering goods from A to B whilst courier van insurance can be used by firms who require delivery services using smaller vehicles that typically only carry one or two items at a time. Here is a breakdown of each type:
Public hire insurance
Public hire businesses have drivers working for them under their own licence but carrying out work on behalf of someone else. This type of policy insures up to three people operating any vehicle covered under the agreement, which means they could all drive separate cars if required with the right cover provided; this includes taxis, limousines and chauffeur vehicles.
Private hire insurance
Private hire companies have a slightly different requirement as they usually only employ drivers who hold their own licence. This type of policy covers up to two people operating any vehicle covered under the agreement. This means you as the business owner can operate any of your vehicles without restriction, whereas an employee will be required to use only the vehicle for which he holds a full driving licence.
Haulage businesses require different cover to that of public hire or private hire firms due to the size and weight of their vehicles, which can range from small vans up to larger lorries. This type of policy is also used by companies who may occasionally carry out other work on behalf of someone else (such as moving furniture), but for whom this isn’t a full-time occupation.
Courier van insurance
Courier van insurance provides customised commercial vehicle insurance policies designed specifically for smaller courier companies with delivery drivers using one or two vans. It typically covers smaller commercial vehicles which typically carry one or two items at a time, but may not always require this level of service. For example, some firms hire out small vans that are used occasionally when moving furniture. These policies are typically much cheaper than personal auto policies because only the driver needs an individual driving licence.
How much does fleet insurance cost?
Fleet insurance costs will vary depending on the type of fleet you have. Public hire fleets are particularly expensive, as they require specialist commercial vehicle insurance to protect your business from claims liability should an accident involving a member of the public occur. Hiring out vehicles can also lead to increased premiums if accidents are caused by drivers who do not hold clean licences or valid no-claim bonus histories within the last five years.
What can you do to reduce the cost?
Due to the high levels of cover it provides for multiple vehicles, fleet insurance can be expensive. However, there are several ways you can potentially reduce the cost of your insurance:
Choose an “any driver” option
Your insurer may offer this scheme where they will provide comprehensive fleet vehicle insurance cover to all drivers who have been employed with your company for at least six months and meet specific criteria; including holding a full UK driving licence class C+E (for larger passenger carrying vans), and having no more than two penalty points on their license. Depending on how many vehicles you have in your fleet, you can sometimes save up to 33% on the cost of cover with an “any driver” option.
Choose an “any vehicle” option
This policy means that any car or light goods vehicles (up to 3,500kg) used for business purposes are covered within one comprehensive insurance package with no restrictions on which vehicles are insured under this scheme. You may still need to meet certain criteria depending upon what type of licence is required by law for each individual vehicle, but it could prove very beneficial if there is a mixture of commercial and private use cars in your fleet. For example, most insurers will allow you to include taxis without age restrictions providing they’re wheelchair accessible. This scheme will allow you to add any additional vehicles your business may acquire during the term at a discounted rate, providing they meet certain criteria such as having been owned by you for more than six months and being used solely within the UK.
Pay a higher excess
As a way of keeping premium costs down, you may be able to pay a higher level of the claim amount known as an excess before your insurer will step in and cover the remaining cost (e.g., for theft or fire damage). In most cases, this won’t apply if someone is injured but it could help reduce premiums on comprehensive insurance packages which tend to have high policy limits with low levels of cover included within them. For those businesses who need upmarket car coverage at a competitive price, there’s also the option to take out what’s called ‘comprehensive plus’ or ‘super-comprehensive’, where only part of the vehicle replacement value is covered by your business’s vehicle insurance policy.
Take out a single fleet umbrella policy
Rather than having multiple different policies, you could opt for a ‘fleet insurance’ package provided by your insurer which includes all vehicles used within one company (with the exception of cars or vans for private use only). If there are vehicles in your business fleet that do not fit into any particular category or have very specialist equipment fitted, this type of scheme may also help to reduce excesses and lower premium costs.
Take out a deferred payment arrangement
Simply put this means paying for fleet insurance cover over an extended period of time rather than all upfront or via monthly instalments, which can save money depending on how much cover you require. Other possibilities include increasing your voluntary excess (you pay higher up-front excess but in return you receive a lower monthly premium) and agreeing to increase your security deposits (if applicable).
How can you determine your fleet insurance requirements?
The first step in the process of determining your fleet insurance requirements is to assess how many vehicles you have, and then decide on a rough estimate as to what they’re worth. Next, decide which drivers will be working with each vehicle for extended periods of time , before moving onto creating an accurate list of all driver information . The final stage is collating the risk assessment data – this includes details such as commute time and location at any given point during daylight hours or overnight when most accidents occur, plus how often the vehicles are operated in low light driving conditions.If possible, try to think of every single way that things could possibly go wrong with your fleet; from fraud scenarios right through to mechanical breakdowns causing injury to your drivers, road users, or members of the public. By taking a proactive approach toward mitigating risk, you’re far more likely to successfully lower your insurance premiums in the long run.The best way of ensuring that your business is covered for every potential eventuality, is by working with a broker who specialises in fleet insurance. They’ll be able to provide an accurate quote based on all relevant information which enables them to cover each vehicle type efficiently and cost effectively – whether it’s commercial vans or minibuses or larger trucks and coaches.A specialist fleet insurance broker will be able to offer you not only “any driver” policies but also “any vehicle” policies too; meaning no matter what size or style of vehicle your company uses, there should be no excess or hidden fees.Finally, it also pays to shop around for the best deal. Although you may be keen on sticking with your current insurer for convenience sake, make sure you search online and compare quotes across a few different providers – this will help ensure that all of your details are correct before signing up.
Can you change the vehicles or drivers on your policy?
An “any driver” insurance policy is basically the same as a standard fleet vehicle insurance policy however you can change any of your drivers or vehicles on this type of cover. So if one of your employees leaves and another comes in, they don’t have to wait for their own individual coverage to start. This kind of fleet package also allows businesses with multiple branches that require different classes of commercial vehicle insurances (i.e., light goods to heavy-goods) which are all registered under the same company name, to be covered by just one single fleet quote. This works well when an employee has been driving a particular class within your business for years without incident but then gets involved in an accident during the course of their work. This type of fleet insurance can also help in cases where an employee is involved in a serious incident but has only recently joined your company (a common example would be if they were at fault for someone’s personal injury claim). An “any vehicle” policy works very much like any driver cover; you are able to change vehicles or drivers on this particular fleet package. This means that when a vehicle becomes too old or needs replacing, whether due to normal wear and tear, or damage caused in an accident, another can take its place without you having to wait for an individual policy which could leave your business short-handed. For businesses which have multiple vehicles registered under different names, this type of fleet insurance is ideal as you can have all the vehicles insured under one single policy.
To sum up
Fleet insurance will not only ensure that all of your business’s vehicles are covered, it can also save you a lot of money and time. By insuring all your commercial vehicles and drivers under one policy, rather than having to pay for coverage for each one by one, you will have more resources to spend on other areas of your business. Make sure you consider all the different types of fleet insurance carefully to find the right policy for your business.