Insurance: Do you use your vehicle for business use?


By Dan Lawrie

Special to GTA Construction Report

Most insurance companies classify vehicle use into one of three categories – commuting to work or transit, commercial use or pleasure and errands only.

While these categories accurately describe the driving behaviour for most people, some drivers who use their vehicle for business purposes have faced a dilemma. Do they report they only use their vehicles to commute to work, or do they acknowledge they use their vehicles for commercial purposes and face higher premiums?

The answer is “yes”, you must disclose the proper usage of your vehicle in order to be properly insured but make sure you are clear as to the extent that you use your vehicle for business.

If you drive your vehicle to work, but also use it to visit clients for limited business, you may need an incidental business use rating for a small increase in premium, and you won’t have to worry about having any problems at the time of claim. Imagine the hardship of finding out you are unable to collect after an accident, especially after faithfully paying your insurance premiums because you failed to disclose the actual use of the vehicle. Don’t be caught in a situation like this. If in doubt, check with an insurance broker about your vehicle usage and see if you need incidental business use.

As well, note that commercial vehicle insurance isn’t just for big trucks.

If you work as a plumber, painter, carpenter or as some other type of contractor, you may need to be rated for commercial use instead of commute to work. Whether you are self-employed or work for a larger company doing this type of work, your insurance company could deny any claim if you failed to disclose the commercial use of your vehicle.

Other uses that may require a commercial vehicle policy include real estate sales, fast food delivery, catering and landscaping or snowplowing services to name a few.

It is important that your broker or agent knows how you use your vehicle so they can recommend the best coverage to suit your needs. If in doubt contact your broker or agent to get the right advice and ensure you have the coverage you need.

To avoid unpleasant surprises, it is important to work with a professional in this area.

Additional questions? Ask us, we’re here to help.

You can reach Dan Lawrie, CLU, C.F.S.B. (CEO) at Dan Lawrie Insurance Brokers toll-free at (800) 661-1518, or visit,. Be sure to mention you read about us in the GTA Construction Report.


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