Vehicle class of use explained

Vehicle class of use is the description in a motor policy of what a vehicle may legally be used for under that insurance. It ranges from social, domestic and pleasure use through business travel and carrying your own goods, to carrying goods or passengers for payment.

It appears on your certificate of motor insurance, and every journey a vehicle makes needs to fall within it.

For businesses, class of use is one of the easiest things to get wrong, because work changes gradually. This guide explains each class, how it applies on a fleet, and which classes different kinds of business usually need.

Why Does Class Of Use Matter?

Insurance has to be in force for the use a vehicle is actually put to, so a policy that does not cover the way a vehicle is being used does not meet the legal requirement for that journey. Class of use also drives the price you pay.

The legal requirement

Section 143 of the Road Traffic Act 1988 makes it an offence to use a vehicle on a road or other public place, or to permit someone else to, without at least third-party insurance in force for that use. The words “for that use” are the ones that matter.

A policy that exists but does not cover the way the vehicle is being used does not meet the requirement for that journey.

How it affects price

A van carrying a plumber’s own tools between jobs is a different risk from a van making dozens of parcel drops a day, and insurers rate them differently. That is why the class of use on your policy has to describe the real work, not whichever option costs least.

Where to find it on your certificate

On your certificate, look for a section headed something like “Limitations as to use”. It lists the uses that are covered and usually states what is excluded, such as hire and reward or racing.

What Are The Common Classes Of Use?

The usual categories are social, domestic and pleasure, commuting, business use, carriage of own goods, haulage, courier work, public and private hire, and specialist uses such as self-drive hire. Class names are not set in law, and each insurer words them differently.

The descriptions below are the broad categories you will usually meet, so read the wording on your own certificate rather than relying on a label.

Social, domestic and pleasure (SD&P)

Personal journeys: shopping, visiting friends, holidays. Company cars that employees may use privately need SD&P on the policy.

Some commercial vehicle policies do not include it, so a van driver taking the van home for the weekend may not be covered for personal trips.

Commuting

Travel between home and a single, permanent place of work. It is usually bundled with SD&P.

Driving from home to different customer sites is generally business use rather than commuting.

Business use

Driving in connection with work, such as visiting customers, going to meetings or travelling between sites. On private and small business car policies, you will often see:

• Class 1: the policyholder, and sometimes their spouse or partner, driving for their own work
• Class 2: business use extended to other named drivers
• Class 3: commercial travelling, typically sales representatives covering high mileage

Fleet policies often describe business use in their own terms and apply it to all drivers allowed by the driving clause.

Carriage of own goods

Carrying tools, equipment, materials or stock that belong to your business, in connection with that business. This is the standard class for trades such as electricians, plumbers, builders and landscapers.

It does not cover carrying other people’s goods for payment.

Haulage (hire and reward)

Carrying other people’s goods for payment, often in larger loads over longer distances. Haulage policies may be divided further by radius of operation or type of goods.

Courier (hire and reward, multi-drop)

Carrying other people’s parcels for payment, usually with many drops in a day. Insurers often treat courier work separately from haulage because the pattern of driving, parking and deliveries is different.

Our page on courier fleet insurance looks at this use in depth.

Public hire and private hire

Carrying passengers for payment. Public hire (hackney carriage) vehicles can be hailed in the street or use ranks, while private hire vehicles must be pre-booked.

Outside London, local councils license taxi and private hire drivers, and in London, Transport for London does.

A private hire policy won’t normally cover picking up passengers who flag you down, so check the class of use with the broker and your licensing authority.

Other specialist uses

These include self-drive hire (renting vehicles to customers), driving tuition, and carrying passengers in minibuses for a charge. Each needs cover written for that purpose.

Which Class Of Use Does Your Business Need?

Match the class to what each vehicle actually does: carriage of own goods for trades carrying their own tools and materials, business use for staff travelling between sites, and hire and reward where you are paid to carry other people’s goods or passengers.

A starting point by business type

This table is a starting point, not a rule, and the insurer decides the exact wording.

Type of business	Typical class of use	Also check
Electricians, plumbers, builders, landscapers	Carriage of own goods, plus SD&P and commuting if vans go home	Tools cover and whether private use is allowed
Sales teams and estate agents with company cars	Business use, plus SD&P and commuting	Whether all drivers are covered for business use
Care and cleaning companies	Business use for travel between clients	Staff using their own cars need business use on their own policies
Parcel and same-day couriers	Courier (hire and reward)	Goods in transit cover
Hauliers	Haulage (hire and reward)	Operator licence type and goods in transit
Taxi and private hire operators	Public hire or private hire, matched to the licence	Passenger liability and licensing conditions
Community groups charging for minibus trips	Passenger carrying under the relevant permit or licence	Permit or PSV operator licence position
Vehicle rental businesses	Self-drive hire	Hirer age and vetting conditions

Fleets with mixed uses

On a fleet policy, the class of use has to cover the widest use of any vehicle, or the insurer has to agree separate terms for different vehicle groups. A policy may allow carriage of own goods for trade vans and hire and reward for a courier vehicle, although some insurers prefer one class across the whole fleet.

Explain how each vehicle is used when you request a quote, so the broker can look for cover that reflects it.

How Do Class Of Use And Operator Licensing Differ?

They are separate requirements that overlap in subject. Having hire and reward insurance does not give you an operator’s licence, and holding a licence does not change your insurance.

Goods vehicle operator licences

For goods vehicles in Great Britain, vehicles over 3,500kg gross plated weight used for business generally need a goods vehicle operator’s licence, whether they carry your own goods or other people’s. The licence types follow a similar split to insurance classes:

• Restricted: your own goods only, in the UK or abroad
• Standard national: your own goods in the UK and abroad, plus other people’s goods in the UK
• Standard international: your own and other people’s goods, in the UK and on international journeys

Vans and journeys abroad

Vans used only within the UK don’t need an operator’s licence. Since 21 May 2022, however, carrying goods for hire or reward in the EU, Iceland, Liechtenstein, Norway or Switzerland in vans over 2,500kg and up to 3,500kg needs a standard international operator licence.

Carrying passengers

For passengers, you need a PSV operator licence to run a vehicle for hire or reward that can carry 9 or more passengers, or a smaller vehicle if you charge separate fares. Heavier goods fleets are covered on our HGV fleet insurance page.

What Happens If A Vehicle Is Used Outside Its Class Of Use?

The insurer may refuse to pay for damage to your own vehicle, and in some cases may seek to recover from the policyholder what it pays to third parties. The driver may also be treated as uninsured for that journey, which is a criminal offence.

How it usually happens

Misdescribed use is rarely deliberate. It usually happens because the business changes and the policy doesn’t.

Typical examples:

• A builder starts delivering materials for a supplier for a fee.
• A florist’s van begins taking parcels for other local businesses.
• A company car used for sales visits is lent to a family member for a holiday.
• A care company driver gives a client’s relative a paid lift.

What it costs

If a claim happens during a journey outside the class of use, the insurer may decline to pay for damage to your own vehicle. The insurer may still have to deal with some third-party claims, and section 151 of the Road Traffic Act 1988 lets an insurer that pays in these cases recover the money, including from anyone who caused or permitted the use.

The driver may also face prosecution for driving without insurance for that use.

Your duty to describe the risk

Section 3 of the Insurance Act 2015 requires a business to make a fair presentation of the risk before a policy starts and when it changes, which includes how vehicles are used.

When Should You Review Your Class Of Use?

At every renewal, and whenever the work changes, before the new work starts rather than after. Read the limitations as to use on your certificate and compare them with what each vehicle actually does in a normal week.

A checklist to run

• Read the limitations as to use on your current certificate.
• List what each vehicle actually does in a normal week.
• Note any vehicles used privately, for commuting or taken home.
• Identify any work carrying goods or passengers for payment, even occasionally.
• Check whether any vehicle is used abroad for paid work.
• Report changes to the broker before the new work starts.

Bringing different uses together

If you are bringing vehicles with different uses onto one policy, our guide to moving to a fleet policy explains how to present them. The fleet insurance glossary defines hire and reward alongside other policy terms.

Sources

• Road Traffic Act 1988, section 143
• GOV.UK: Being a goods vehicle operator, types of licence
• GOV.UK: Transport goods in and out of the UK using vans or car and trailers
• GOV.UK: PSV operator licences
• GOV.UK: Taxi driver licence
• Insurance Act 2015, section 3
• Road Traffic Act 1988, section 151

Updates

• 17 September 2026 : last reviewed
• 17 September 2026 : Legal and regulatory points checked against official sources

General information about UK fleet insurance, not advice. How we write and check our content