Company vehicles: what happens if you’re caught driving without insurance?

There are over 50 million people with a driving licence in the UK and around 40 million licenced vehicles — that’s a lot of cars on the road! 

As a small business owner, you might have a few cars or vans shipping out deliveries or your sales team on hand to secure a deal. But what happens if a member of staff is caught driving without valid insurance? And what does this mean for your business? 

In this Bionic guide, we’ll walk you through everything you need to know about company vehicles and who needs to make sure that the vehicle is insured.  

What is a company car? 

First and foremost, let’s get down to the basics. A company car is a vehicle your business owns and provides to employees for work-related purposes such as client or supplier meetings or even food deliveries. 

It's like a perk that helps your team get from point A to point B and also a representation of your brand on the road!  

When would employees use a company car? 

A company car can be a great incentive for employees who prefer to work independently. Here are some reasons why employees might need to drive a company car: 

• Client meetings —  If your team often meets with clients and customers, a company car can be invaluable. It allows your employees to travel in style and comfort and really push your name out there.  
• Sales and marketing — For your sales team, a company car can be a real game-changer. Whether they’re attending industry events, visiting potential clients or doing important product demonstrations, having reliable vehicles can make all the difference.  
• Service calls — If your business provides services with on-site visits like plumbing, electrical work or landscaping, you’ll first want to ensure you’re covered with tradesman insurance. Secondly, a company car or van ensures employees can get to job sites on time and work efficiently.  
• Deliveries and logistics — If your business delivers products, takeaways, or provides logistical support, you’ll know how often you rely on your company vehicle to transport goods from place to place. Whether delivering packages or moving equipment, having a dedicated fleet helps get things done. 
• Employee commuting — Some businesses even go one step further and offer company cars as part of their employee benefits package, allowing staff to use them for their daily commute. This can be a big incentive for recruitment and retention within your business — especially for employees who don’t have their own mode of transportation.  

What are the laws for driving a company vehicle? 

When your staff are driving their company vehicle, there are some responsibilities and rules of the road they’ll have to abide by. 

Compliance with traffic laws 

It may seem obvious, but sometimes the obvious needs to be said, especially when your business has its name attached.  

 All employees who drive a company vehicle must follow and obey all traffic rules. This includes everything from speed limits to traffic signals and road signs. If an employee fails to comply with these rules, it can result in some hefty fines, legal issues, points on their licence and a bad reputation for the company.  

Have a valid driving licence 

To drive a company vehicle in the UK, all employees must have a valid driver's licence for the type of vehicle they’ll be operating.  

 As a business owner, make sure your team's licences are up to date, and they don’t have any driving convictions that mean they legally can’t be on the road. 

Vehicle tax and MOT 

Like any other vehicle in the UK, company cars must be properly taxed and have a valid MOT certificate. 

You can tax your vehicle on the GOV.UK website.  

It’s also a good idea to place a copy of the MOT and insurance certificate in the glove box of each company vehicle. This can help reassure your staff that the legal requirements have been met, and, if needed, they can present these documents to the police if they’re pulled over.  

Who is responsible for the insurance? 

In 2023, the Motor Insurers Bureau helped the police seize more than 130,000 uninsured vehicles – that's a whole lot of people driving without insurance. 

And, when it comes to the responsibilities of insurance, this can be a bit of a grey area. But who is responsible? The employer or the employee? 

In simple terms, it’s the responsibility of the employer to seek insurance as it’s you who owns the vehicle, not your employee.

Is driving without insurance a criminal offence? 

Yes, driving without insurance is a serious criminal offence, regardless of whether it’s you as the business owner or another member of staff driving the vehicle.  

Insurance is designed to cover and protect yourself and other road users should you get into an accident and there are costs associated with it.  

The minimum level of insurance that businesses need is third-party insurance — this will only cover the costs of others in an accident.

But, most companies opt for comprehensive cover, as it covers the costs following an accident as well as losses from fire and theft.

What are the penalties for driving without insurance? 

Driving any vehicle without insurance is against the law, and the consequences can be bad for your employees and your business.  

If you or one of your employees are caught driving a company vehicle without insurance, at a minimum, the police can: 

• Give a fixed penalty fine of £300 
• Hand out 6 penalty points on a driving licence 

The police will decide whether more serious cases — driving without passing a driving test, giving false details or driving a high-risk vehicle — without insurance warrants the case being handled in court.  

Under this, a court can issue: 

• A fine of any amount 
• Disqualification from driving 

The police also have the power to seize and, in some cases, destroy a vehicle driven uninsured. 

You, the business owner, may also be liable for other costs, including: 

• Higher car insurance premiums in the future 
• Any costs associated with the accident, such as a third-party 

These offences can have a serious knock-on effect on your business.  Find out more about fines on the government site.

Keep your business on the move with Bionic 

No matter whether it's your sales team or employees commuting to work, making sure your employees have proper insurance in place to drive company vehicles is crucial. Without it, you’re potentially putting your business and your employees at risk. 

If you want to find out more about the different insurance we offer here at Bionic, compare business insurance or start a quote online today - our knowledgeable insurance team are on hand to help. Or, head over to our insurance guides to find out more about business insurance.