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Published 05 March 2021
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What is Business Breakdown Cover and Who Needs It?

Business breakdown cover can provide specialist protection for company fleets, delivery drivers and the self-employed, although standard cover may be sufficient for some people’s needs. Find out what commercial breakdown cover includes and if you need it.

Business breakdown cover is an optional form of protection that can help you if your vehicle breaks down. Even though it’s not legally required, many business owners and sole traders will choose to get it so they have peace of mind while their vehicle is on the road.

If a vehicle is essential for the running of your business and for earning money, you may want breakdown cover to minimise the expense and disruption should something go wrong in the middle of a job.

There are specialist business breakdown policies for a range of vehicles, including cars, vans, trucks, HGVs and fleets, that can help drivers resume their business activities if their vehicle breaks down.

However, if you are self-employed or a sole trader, you may not need a specific business breakdown policy as you may be able to use standard cover instead.

Read on to find out more about business breakdown cover and who could benefit from it.

What is business breakdown cover?

Business breakdown cover is simply breakdown cover that’s designed for commercial vehicles. This specialist cover can cater more specifically for business needs, and can also cover drivers/vehicles that may not be eligible for a standard policy because of their commercial activities.

There are business breakdown policies for different types of businesses and for a range of vehicles including:

  • Cars.
  • Vans.
  • Motorbikes and mopeds.
  • Taxis and private hire vehicles.
  • Hire and Reward e.g., couriers.
  • LGVs.
  • HGVs.

If you have a company fleet that is a mix of different vehicles, such as cars and vans, you may be able to cover them all under one policy. Typically, covering multiple vehicles under one policy will be cheaper per vehicle than taking out individual policies.

Providers may set some restrictions on the vehicles that can be covered, setting maximum weight and height limits, for example, but you may still be able to find specialist cover for vehicles that don’t meet the standard requirements.

» MORE: What does breakdown cover include?

How does business breakdown cover work?

Business breakdown cover acts as a safety net should one of your vehicles break down, as you can call the breakdown provider to get it fixed and back on the road as soon as possible. This reduces the disruption caused by breaking down and will help you to resume your business activities as soon as possible.

Business breakdown cover will normally be vehicle-based, which means that anyone who drives the vehicle is covered. This is useful as many businesses, particularly delivery and haulage-based ones, are likely to have vehicles that are regularly driven by different people.

As with standard cover, you can choose different levels of commercial breakdown cover including basic assistance, which will provide help at the scene to try to get you back on the road, and national recovery, which will ensure you can continue to your chosen destination.

» MORE: Main types of breakdown cover

Alternatively, businesses may be able to opt for pay-as-you-go breakdown cover. With this cover, you pay an annual admin fee, then you will only pay for the services and repairs you require if you break down and need to call for help.

Some providers may offer business and fleet management online tools with their cover to help you manage your vehicle service records and view your policy documents, among other things.

Who needs business breakdown cover?

You need to have the appropriate level of car insurance when you use your car for commuting or commercial purposes, but unlike car insurance, business breakdown cover is not a legal requirement.

However, if your business relies on one or more vehicles, you may find breakdown cover useful, especially if you regularly travel long distances.

Whether you have a large fleet of trucks, you’re a delivery driver in your own van or you carry paying passengers in your car, breakdown cover can ensure that you, any passengers and any transported goods can get help if something goes wrong on the road.

As a rule, if you use your vehicle as part of your business, you will need business breakdown cover rather than a standard breakdown policy.

Some sole traders may be able to buy standard breakdown cover rather than specific commercial cover, but you would need to check the terms as many standard policies won’t cover vehicles that are used for private hire or deliveries, for example.

Breakdown cover for the self-employed

Self-employed people that use their personal car as part of their business may not need specific business breakdown cover. For example, if you simply use your car to drive to different jobs, standard breakdown cover may be sufficient.

» COMPARE: Breakdown cover

However, if you are a courier or use your vehicle for private hire, you may not be eligible for standard cover and need to get business cover.

Always check the policy documents for any exclusions to make sure your business activities don’t breach the terms of the breakdown cover. If you are unsure, ask the provider before buying the policy, rather than finding out later that you’re not covered, for example, if you use your car for deliveries.

If your business activities mean you are not eligible for a provider’s standard cover, then you will be able to get commercial breakdown cover instead.

Where can I buy business breakdown cover?

You can buy business breakdown cover online from most breakdown providers. If you require specialist cover, or you want to tailor your policy to have different levels of cover on different vehicles for example, then you may be able to arrange this over the phone.

Depending on your car insurer and the cover you require, you may be able to buy breakdown cover alongside your car insurance.

If you need to take your vehicle abroad, there are European business breakdown cover options available too.

When you buy breakdown cover for your business vehicle, make sure that your commercial activities are covered by checking the terms in the policy documents or by asking your provider.

» COMPARE: Van breakdown cover

Using your business breakdown cover

If you’re self-employed, breakdown cover counts as an allowable expense if you use your vehicle as part of your business activities. This means you can deduct it from your profits before you pay tax.

Business breakdown cover is also an allowable expense for limited companies.

Make sure that everyone who drives a company vehicle that’s covered by a breakdown policy knows what to do if they break down, including who to contact and what the procedure for getting help is.

Some breakdown providers may send you a card that gives the driver a number to call in an emergency. The card can also act as identification when help arrives on the scene, and it can verify the details of the business and your cover. Read on to learn more about what you should do if you break down.

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