Can I use insurance premium finance to spread the cost of fleet, GIT and liability insurance?

Short answer: Yes — in most cases logistics businesses can spread the cost of fleet, goods‑in‑transit (GIT) and liability insurance using insurance premium finance. Whether it’s the best option for your business depends on the insurer/broker terms, deposit and fees charged by the finance provider, and your cashflow priorities. This guide explains how premium finance works for logistics covers, typical costs and terms, benefits and risks, eligibility, alternatives and a practical checklist to help you decide. Ready to compare options? Get Quote Now.

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What is insurance premium finance?

Insurance premium finance (IPF) is a way to spread an insurance policy’s lump‑sum premium into regular payments. Instead of paying the insurer the full annual premium, a finance provider pays the insurer on your behalf and you repay the finance provider over an agreed term (usually monthly). IPF is offered by specialist premium finance firms, banks and some broker partners.

Key points:

• Finance covers the insurer’s premium; you still hold the insurance contract with the insurer or broker.
• Typical terms are 6–12 months to match annual policies; multi‑year terms are possible but less common.
• Some arrangements require a deposit (often 0–30% of the premium).
• Costs include interest and arrangement/administration fees — compare representative APRs or total cost.
• UK Business Loans introduces you to lenders/brokers who can arrange premium finance; we do not provide credit or insurance directly. If you want to check eligibility and get matched, Get Quote Now.

Which logistics insurance policies can premium finance cover?

Premium finance is commonly available for logistics sector policies that are billed as an annual (or pro‑rata) premium. The most frequently financed covers for logistics businesses are:

Fleet insurance (commercial vehicles)

Fleet policies for vans, rigid trucks and multi‑vehicle programmes are typically eligible. Insurers/brokers that issue an annual or multi‑vehicle premium usually allow third‑party premium finance. Terms are normally aligned with the policy year; the finance provider pays the insurer and you repay over monthly instalments.

Goods‑in‑Transit (GIT) insurance

GIT policies which have an upfront premium or renew annually can generally be financed. If your GIT cover is calculated monthly or as part of a policy package, confirm with the broker that the premium can be split for finance purposes.

Employers’ & Public Liability insurance

Liability covers taken out by the company (annual premiums) are frequently financed alongside fleet and GIT. Special endorsements or mid‑term changes (adding vehicles, new drivers) can affect finance terms — check consent and amendment procedures.

Important: finance availability depends on whether the insurer or broker will accept third‑party payment by a finance company. Ask your broker or insurer if premium finance is permitted for your specific policy.

How premium finance works for logistics businesses (step-by-step)

1. Obtain the insurance quote from your chosen insurer or broker (total annual premium).
2. Choose premium finance — either via the insurer’s finance partner, your broker or an independent premium finance provider/broker.
3. The finance provider pays the insurer the agreed premium (less any deposit you pay up front).
4. You repay the finance provider in monthly instalments over the agreed term, plus interest and any fees.
5. At renewal you can either re‑finance the new premium or pay cash; some lenders offer rollover options.

Example repayment schedule (illustrative only):

Item	Amount
Annual premium	£12,000
Deposit (10%)	£1,200
Amount financed	£10,800
Term	12 months
Representative APR (example)	15% APR
Approx. monthly repayment (incl. fees/interest)	£980

Note: lenders may show cost as a flat fee schedule rather than APR — always ask for a representative APR and a full cost of credit example so you can compare fairly with other finance options.

Costs, fees and typical terms

Costs vary by provider but typically include:

• Deposit: 0–30% depending on credit strength and provider.
• Interest/finance charge: expressed as APR or flat fee — compare total cost.
• Arrangement or admin fees: a one‑off charge to set up the finance.
• Default/late payment fees: charged if repayments are missed.
• Early settlement: some lenders charge a settlement fee if you pay early.

What to ask for before you sign:

• Representative APR and an example monthly repayment schedule.
• Full breakdown of fees and any penalties.
• Whether the lender performs a hard credit search and whether mid‑term endorsements require lender consent.

Benefits and risks for logistics companies

Tip: compare the total cost of premium finance with other options (short‑term business loan, overdraft or company card). If preserving cash is critical, premium finance often makes sense — but always check representative APR and T&Cs.

Eligibility — who can get premium finance?

Typical businesses eligible include limited companies and partnerships operating logistics or transport fleets. Premium finance providers usually require:

• Company details and trading history.
• A copy of the insurance quote or policy schedule.
• Details of vehicles and drivers for fleet policies.
• A credit check — some lenders use soft searches for eligibility, others perform hard checks at application stage.

If you have imperfect credit, specialist premium finance brokers often have panels that can help. To compare suitable providers for your situation and get a quick eligibility check, Get Quote Now.

Alternatives to premium finance

• Business loan: a fixed‑term loan could cover the premium and may offer better overall rates if you need larger sums for working capital too.
• Overdraft or business credit card: flexible but potentially expensive if used long term.
• Invoice finance: release cash from unpaid invoices to pay premiums.
• Self‑funding: paying cash avoids finance costs if you have the liquidity.

Each option has trade‑offs — liquidity, cost and speed. If you’d like a tailored comparison, submit a short enquiry and we’ll match you to brokers and lenders who specialise in logistics insurance finance: Free Eligibility Check.

Practical checklist for logistics managers before you sign

• Get a full cost example (representative APR and total amount repayable).
• Confirm deposit, monthly repayment date and payment method.
• Ask how mid‑term policy amendments (new vehicles, driver changes) are handled.
• Check early settlement penalties and default fees.
• Keep copies of the finance agreement and contact details for the finance provider.

If you want help running through these points with a specialist, we can match you to experienced brokers — Get Quote Now.

FAQs

Can I finance a multi‑year fleet insurance policy?

Multi‑year premium finance is possible but uncommon. Most providers match the finance term to the policy year. Ask your broker for multi‑year options if you have multi‑year pricing.

Will premium finance affect my credit score?

It depends. Some providers use a soft search for initial checks; many will perform a hard search when making a formal offer. Ask the provider which type of check they use.

Can I add vehicles mid‑term to a financed policy?

Yes — but the finance arrangement may need to be amended. Confirm whether the lender requires notification or consent for endorsements and whether extra premium can be financed.

What happens if my business stops trading while an agreement is active?

The finance agreement remains payable. Speak to the lender and your insurer for settlement options; early settlement charges may apply.

Is premium finance taxable?

Premiums themselves are insurance costs; the finance interest is a borrowing cost. For tax treatment, speak to your accountant about deductible expenses and VAT implications (if any).

How quickly can I get a decision?

Many premium finance providers can offer a decision within hours if they have complete documentation. Specialist brokers can speed up the process.

Still have questions? Get matched with a specialist who understands logistics insurance finance — Start your free eligibility check.

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How UK Business Loans helps logistics businesses

UK Business Loans connects logistics operators with lenders and brokers who specialise in insurance premium finance and wider business finance. We don’t provide loans or insurance — we introduce you to providers who can help. Completing a short, no‑obligation enquiry helps us match you to the right panel quickly so brokers/lenders can contact you with quotes and tailored options. Get Quote Now.

Important: UK Business Loans is an introducer; we do not provide credit or insurance and this page is for information only. Always read the lender’s and insurer’s full terms and ask for a representative example before committing to any finance.

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Related resource: for wider funding needs in the transport and distribution sector see our specialist page on logistics business loans.

Written by: Content team, UK Business Loans. Published: 31 October 2025.

1. What is insurance premium finance and how does it work for logistics businesses?
Insurance premium finance lets a finance provider pay your insurer the annual premium and you repay the provider in monthly instalments (usually 6–12 months), keeping the insurance contract with your insurer or broker.

2. Can I use premium finance to spread the cost of fleet, goods‑in‑transit (GIT) and liability insurance?
Yes — most fleet, GIT and annual liability premiums can be financed where the insurer or broker permits, subject to deposit, fees and provider terms.

3. How does premium finance compare with taking a business loan to pay insurance premiums?
Premium finance is a purpose‑built, typically short‑term option aligned to policy years and easy to arrange, while a business loan may offer more flexible terms or lower overall cost depending on rates and your needs.

4. What costs should I expect when using premium finance (APR, deposit and fees)?
Expect a deposit (commonly 0–30%), interest shown as a representative APR or flat fee, arrangement/admin charges, and possible late‑payment or early‑settlement penalties.

5. Will applying for premium finance affect my business credit score?
It depends — some providers use soft searches for eligibility checks but many perform a hard credit search when making a formal offer, so ask the provider in advance.

6. How quickly can I get a decision and have the premium paid?
Many premium finance providers can decide within hours once you supply complete documentation, and specialist brokers can often speed up the process.

7. Who is typically eligible for premium finance for logistics insurance?
Limited companies, partnerships and other trading entities in logistics with trading history, a policy quote or schedule, vehicle/driver details and a passable credit check are usually eligible.

8. Can I add vehicles or make mid‑term changes to a financed fleet policy?
Yes — mid‑term endorsements are usually possible but may require lender notification or consent and can increase the financed amount and monthly repayments.

9. What are alternatives to insurance premium finance for covering insurance costs?
Alternatives include a fixed‑term business loan, overdraft or business credit card, invoice finance to release working capital, or paying the premium from existing cash reserves.

10. How can UK Business Loans help me find the right premium finance or business loan?
UK Business Loans matches you quickly and free to FCA‑regulated brokers and lenders who specialise in logistics insurance finance and business loans — we introduce providers but do not lend or give financial advice.