But even the nature of the business isn’t always clear-cut.

Len Benson, chairman of ACFO’s London West region and associate director at commercial insurance broker Peter Lole & Co, says: “What constitutes commercial travelling is open to debate but my opinion is that if your business appointments are pre-arranged then that is class one or two.

"If you visit clients on your rounds to see if they need any more product etc. then it’s class three.”

Wiltshire Council, which has about 4,000 grey fleet drivers (including volunteers), debated whether its car parking attendants (some of whom are grey fleet drivers) needed class one or class three business use insurance.

As they have equipment in their vehicles the council thought class three might be needed, but it decided class one was acceptable as the drivers are not selling goods.

The council’s former salary sacrifice scheme also required clarification with the salary sacrifice provider.

Benson advises that class one is the use required if you are the managing director travelling to meetings all over the country or if you are the office junior who drives to the bank once a week.

Any employee on a PCP or using their own car for business will need either class one or three depending on

their job. Not many people who use their own car for work allow their colleagues to drive as well, so class two would be unusual.

Benson also warns those checking insurance documents to be careful about just looking at the insurance certificate as it only gives “very basic information”.

“The policy schedule in conjunction with the policy booklet gives precise information,” he says.

“For example, if a policy is issued for any driver over 25, the certificate of insurance will just say any driver, and make no mention of the age limitation. The age limit will be endorsed on the schedule or policy booklet.

“By the same token, the ‘use’ may well say ‘personal business use by policy holder and spouse’ but the ‘exclusions’ may not say ‘excluding commercial travelling’.

This doesn’t automatically mean that the policy holder has class three use, as commercial travelling may well be excluded elsewhere.

“Certificates of insurance are more likely to say what is allowed than what isn’t.

 “Also remember that some insurers will charge use loadings, or waive them, dependent on mileage.

"Someone doing 30,000 miles a year just going to and from one place of work, because they live miles away, may be charged class two or three rates even though they only need social domestic and pleasure, including commuting.”

Take care if a grey fleet driver decides to use their spouse’s vehicle for a business journey instead of their own vehicle as it might not be insured for business use.

“The employer should have a policy that the employee can only use a vehicle that they have told the employer about,” says Simon Baker, head of commercial motor at AXA.

Insurance certificate checks could be done quarterly or annually or, ideally, when the policy is up for renewal.
 

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