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Van insurance is driving firms crazy

Picture this: you’re a small business in the building trade. You’ve only been going for less than a year, but orders are flying in, and you’ve decided you’ll need to increase your modest workforce to help keep the cogs keep turning and win new business. 
 
Like many, you’ve settled on an apprentice as it’s a great way to train staff - and stats show they’re more likely to stay with you for longer. A key part of the job will be driving the company van, collecting and delivering materials, picking up fellow workers, and transporting equipment. 
 
So you’re all set, everything’s planned, but then you ring the insurance company to see how much it will cost to add a young driver to the company policy. And that’s when your plans start to unravel.
 
Unfortunately, this is the situation faced by an increasing numbers of businesses, particularly those in the trades where van usage is often a prerequisite top employment. It leaves smaller firms with a difficult choice: recruit people under the age of 25 and pay insurance premiums as high as £7,000. Or only employ over 25s. 

Joel-Perkins

Joel Perkins, who runs who runs Sale based Architectural Coating Solutions (ACS)

 

The latter, however, penalises young people attempting to get on the job ladder, and must be impacting on the number of youngsters accessing the types of apprenticeships desperately needed by the trades. 
 
The scenario above is actually the story of FSB member, Joel Perkins, who runs who runs Sale based Architectural Coating Solutions (ACS), an on-site paint application company.  The problem is so acute it has forced him to turn new business down, and puts bigger rivals at an advantage. In fact, for Joel, aged 23, the issue is two fold. 
 
“Not only does the insurance cost make it extremely expensive to employ anyone under the age of 25, it’s been a real issue for me too,” he explains. “Try as I might, there’s been no way I can get van insurance at sensible prices – the quotes have been frankly, crazy. At the moment I have to drive around in a 1.3 Vauxhall Astra estate – it’s the next best thing to a van but far from ideal. My premium for that has just gone up from £2,400 to £2,800 despite my no claims bonus getting another year. The facts are I’m the boss but I’m made to feel like a junior. 
 
“I want to hire apprentices but I can’t. If I took on an apprentice at 18 years, and they completed the course and qualified after three years, there would still be three or four years before they hit 25 which is what the insurance companies keep telling me is the age the premiums really go down. It’s just not viable, and it actually means I have to discriminate on age grounds which I don’t like doing. This must be happening everywhere.”
 
Electricians, plumbers, florists, mobile mechanics, kitchen and bathroom fitters, builders, scaffolders – all sectors where there is high dependency on vans, and who all have similar stories to tell. 
 
Have you been affected by issues raised in this story? FSB wants to hear about them. E-mail robert.downes@fsb.org.uk with details.