Insuring the car for business as a self-employed professional
In a sole trader business, private and business run into one another, on the road as well. The question is not whether that is allowed, but what belongs on the policy schedule.
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In brief
A sole trader business is not a separate legal entity, so the car is almost always registered in your own name. In insurance terms you then simply remain the policyholder and keep your personal no-claims years: an advantage you lose as soon as the vehicle is registered to a private limited company. What does change is the declared use. With almost every company, commuting still counts as private use; visiting customers, carrying materials and going from job to job daily is business use and has to appear as such on the policy.
If you drive a van, a second layer is added: the van insurance for self-employed professionals has theft clauses of its own and raises the question whether your fitting-out has been declared. Tools and materials in the vehicle do not fall under own-damage cover; that needs a tools insurance, and for your own goods that you move regularly a own goods in transit insurance. If you want to keep using the car privately as well, read what is involved at using the company car privately.
The point self-employed people most often underestimate is their own loss. The compulsory cover under Article 2 of the Dutch Motor Insurance Liability Act (WAM) pays the other party. If you cause an accident yourself, you are on your own with your injury and your loss of income: there is no employer liable under Article 7:658 of the Dutch Civil Code and no continued payment of wages. You fill that gap with disability insurance, possibly supplemented by a personal accident insurance.
This page deals with one situation. The full overview is on Compare car insurance.
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What to look out for
Four points that are more often decisive for a self-employed person with one car than the premium is.
Declaring business use costs less than concealing it
The difference in premium between private and business use is usually limited. The difference after a loss is not: if the actual use turns out to differ from the declaration, the insurer can reduce or refuse the payout under Article 7:930 of the Dutch Civil Code, even where the use had nothing to do with the loss.
Carriage for third parties is a different policy
If you carry parcels, meals or people for a client for payment, that is no longer business use but professional carriage. There are separate products for that, such as a courier insurance or a taxi insurance. Under an ordinary policy this is excluded, even where you do it only a few days a month.
The contents of the car are not own-damage cover
After a break-in, own-damage cover pays for the lock, the sliding door and the bodywork. The stolen machines, the laptop and the materials stay outside it. With separate cover, watch the overnight clause: many policies require the vehicle to be kept in a locked space overnight and require signs of forced entry.
What the policy never covers
Fines, mechanical failures and wear fall outside it. For damage you cause knowingly and deliberately, the exclusion in Article 7:952 of the Dutch Civil Codeapplies. Driving without a valid licence or under the influence costs you your own-damage cover and leads to a recovery action. And turnover you lose because you cannot drive is not damage to the car and therefore does not follow from the motor policy.
What does your premium depend on?
- Stated use: private, business or professional carriage
- Annual mileage: a self-employed person often falls in a higher band than expected
- No-claims years in your name: with a sole trader business they simply remain yours
- Value and version of the vehicle: including declared fitting-out, signwriting and accessories
- Storage and security: on the street, on a drive or in a locked space
- Type of cover and excess chosen: for an older van, third-party, fire and theft often weighs more heavily
Insurers weigh these details differently. That is where your saving is.
What is covered with business use
| Situation | Third-party liability | Comprehensive |
|---|---|---|
| You hit the gate of a customer's business premises while turning on their site | Yes | Yes |
| A stone chip on the motorway puts a star in your windscreen | No | Yes |
| Your charging cable is stolen while the car is plugged in at a public charging point overnight | No | Provided that |
| In a break-in, your laptop and quotation folder are taken from the back seat | No | No |
| The range of the battery drops noticeably after four years | No | No |
| You consistently drive far more kilometres than you declared in the application and cause a loss | Provided that | Provided that |
Business items in the car fall outside the motor policy. That needs separate cover.
Frequently asked questions
This is what people ask us most.
Does the car have to be registered to my business?
With a sole trader business that cannot be separate from you, because the business is not a separate legal entity. For the insurance it then makes little difference. For the tax treatment it does, because the car can be a business or a private asset. If you work through a private limited company, the car is registered to that company and you lose your personal accrual of no-claims years.
Does commuting count as business use?
With almost every insurer, no. Driving from home to a fixed place of work and back falls under private use. As soon as you visit customers on the way, collect materials or drive from site to site, it is business use. If you are in doubt, choose the wider declaration; it makes little difference to the premium and prevents a discussion afterwards.
Am I insured if I take a customer in the car?
Passengers are insured under the compulsory WAM cover for injury caused with the vehicle, even where you caused it yourself. Your own injury does not fall under it. If you carry people regularly for payment, that is carrying passengers for hire or reward and the ordinary policy no longer fits the use.
What if an accident stops me working for a few weeks?
The motor policy deals with repairing the vehicle and nothing more. If someone else was at fault, you can recover your loss of income from them under Article 6:162 of the Dutch Civil Code, provided you can support it with figures. If you caused it yourself, you bear the loss, unless you have disability cover or a personal accident insurance.
Every situation is different. For these situations we have a separate page.
- Compare car insuranceThe main page
- Using and insuring a private car for businessDeclared use, employer's risk, motor vehicle exclusion
- Insuring a car for self-employed professionalsPrivate and business, whose name, mileage
- Using the company car privately as wellFamily members, holidays, excess
- Business car insurance for a company vehicleFitting-out, tools, load
- Driving for business as a self-employed professional: what an accident costs youReplacement vehicle, loss of turnover, injury to yourself
- A few cars on the business: what small and medium-sized firms arrangeSeparate policies, changes, growth
- Insuring a PeugeotPeugeot, value over time, security, repair