Can helping a friend invalidate your business van insurance?

It’s good to help a friend with your van, but make sure you understand the insurance implications

WE’VE all done it – used our business van to help a mate shift stuff after work. Or a run to the dump for a family member.

It may be a favour. Perhaps they pay you diesel money. Maybe it’s an after-hours earner. Either way, you could be leaving yourself open to an expensive conversation with your insurers if anything goes wrong.

AXA Business Insurance surveyed 450 commercial van drivers from small and medium-sized UK businesses. It found that nearly half of all van drivers spend up to two hours every week using their van for non-commercial purposes. And 81% of van drivers get asked to use their van to help out friends, family and acquaintances.

But about one-third of all van owners don’t know if their insurance covers them to do so. And it might not.

What about the contents?

AXA found that 34% of all requests to borrow a van were to help move house and 18% were to transport furniture. However, many van insurance policies don’t cover a van’s contents.

No problem if you’re taking a mate’s old sofa to the tip. But what if you’re helping him move and his designer furniture and mega-screen TV get damaged or stolen en route?

What about payment?

In AXA’s survey, 17% of requests for help were to transport stuff for someone else’s small business. But some insurers won’t cover that. They regard it as a part-time or secondary occupation, especially if any payment’s involved.

Do business van drivers get paid for helping out? Yes. According to AXA, nearly one in four business van drivers said they’d accepted payment for use of their van. A further 28% said they’d received the cost of fuel and 24% got a favour in return, instead of cash.

What about other drivers?

Most drivers understand that letting someone use your van could contravene your insurance cover. Even if they’re covered on their own insurance for other vehicles, chances are it’ll be third party only.

So if they ding your van, you aren’t covered. And if you’re covered on your own insurance, what happens to your no-claims bonus?

Check the wording on your policy before you hand over the keys. Even if you have an ‘any driver’ policy, ensure there are no restrictions on age or past convictions.

Is helping mates a false economy?

Depends if you have to claim.

Darrell Sansom, managing director of AXA Business Insurance, says, “Often van owners of commercial vans are ‘employed’ by friends or family to help them move furniture or carry boxes, just because they are the cheap option.

“However, there are a number of reasons why both driver and ‘mates’ should be very careful before doing this. The result of a theft or accident if not properly insured will almost certainly outweigh the savings made.”

Is short-term insurance the answer?

It’s one solution, but first check what your business van insurance policy says. You may already be covered for what you’re doing. But look out for the caveats we’ve mentioned. And bear this in mind: if you take out short-term cover and your mate prangs your van or damages its cargo, your no-claims won’t be affected.

Temporary insurance for business vans can be bought for anything from one day up to 28 days. You can get it online and be covered 15 minutes after you’ve bought it. Or rather your mate has.