Insurance Encyclopaedia

Business use

Business use in insurance terms refers to you using either your car, home or another item of yours to earn an income. If you believe this is something that you are doing, it’s best to let your insurer know to make sure that you have enough cover or even any cover at all.

What’s the difference between business, private and commercial use when it comes to car insurance?

Private use is when you only use your car for social purposes like dropping the kids at school, visiting friends or driving to and from work. Business use is when in addition to using your car for social purposes you also use it to do your job like: • Visiting or entertaining clients; • Going to business meetings; • Going to conferences or training; • Dropping or collecting things for business purposes (e.g. money, documents, etc.); or • Networking with colleagues or clients. Some insurers allow you to make a certain number of business related trips in a month while still being classified as private use, so it’s best to check with them to be sure. In contrast, commercial use is when you use your car to make money, for instance, as a delivery vehicle, to transport passengers for money or to carry out your trade – like a plumber or electrician. In this case you need a special commercial policy.

Am I covered if I use my home for business?

Most insurers will not cover damages to your contents or building if you are running a business from home. The best thing is to tell your insurer to make sure your cover is exactly right for you.

When do I need business insurance on my home and contents?

If you generate an income by working out of your home, you’ll most likely need business insurance to ensure that you are sufficiently protected if something bad happens, especially if some of these things apply to you: • Customers or clients coming to your home; • Inventory or business supplies stored in your home; • You risk losing your income if your home was destroyed in a fire; or • Employees working inside or outside your home.

I’m a freelancer, and use my personal laptop for work. Do I need business cover?

Many insurers will cover you if you use your laptop for work at home. As soon as you start taking your laptop out of your home to do work, you will either need to specify it on your contents policy or in some cases you will need to buy business cover. It’s best to check with your specific insurer though.