Light commercial vehicles (LCVs) drive the Irish economy forward. Vans are crucial in business logistics and supply chains, delivering goods and ensuring operational efficiency. E-commerce and retail services rely heavily on LCVs for last-mile delivery, meeting customer demand with timely delivery and expanding their business in new regions. And for plumbing, carpentry and electrical work, vans are ubiquitous for transporting tools and materials.
These fuel-efficient, versatile and agile vehicles are valuable assets for small businesses. Their growing use across multiple sectors has led to an increase in sales. According to a 2024 report by the Society of the Irish Motor Industry (SIMI), over 30,000 new LCVs were registered in 2024, an increase of 7% compared to 2023[1].
Given the growing number of van owners in Ireland, this article will cover LCV trends, costs and insurance considerations.
Key factors influencing LCV insurance costs
Insurance is essential for financial peace of mind, covering liabilities and ensuring businesses remain compliant and secure. There are several key factors that affect insurance costs and availability:
- Engine size
Insurers consider LCVs with larger engines riskier than those with smaller engines. This is primarily due to the increased likelihood of accidents, as larger engines produce higher speeds and carry heavier loads. Additionally, vans with bigger engines require higher fuel consumption and potentially entail greater repair costs, leading to increased insurance premiums. - Emissions
Insurers consider emissions in their risk assessments, as vans with greater carbon dioxide (CO2) emissions might face stricter environmental regulations and more expensive road taxes. High-emission vehicles are often associated with older models or less efficient engines, which could prove costly to maintain or repair. Businesses using low-emission or electric vans (EVs) may benefit from lower premiums due to tax incentives and their environmentally friendly profiles. - Vehicle use
The geographical locality of a vehicle significantly impacts the related insurance costs. Delivery vans operating in urban areas often incur higher premiums due to accident and theft risks, and frequent stops and long routes expose them to heightened road risks. On the other hand, trade vans used by plumbers and electricians may have lower premiums if they are primarily used for shorter trips or stationary jobs. - Safety features
Installing telematics to track driving behaviour or security features like alarms and immobilisers may reduce premiums by directly lowering accident and theft risks. By investing in technologies like anti-lock braking systems (ABS), electronic stability control (ESC) or rear-view cameras, businesses demonstrate a proactive approach to risk management, which may also help to reduce insurance premiums. According to a 2024 report published by Samba Safety, a cloud-based risk management company, 72% of fleets have noticed reduced accidents and claims by combining telematics with training initiatives[2]. - Vehicle value and parts availability
Expensive LCVs or those with rare parts have higher repair costs, raising premiums. Older vehicles may incur higher costs due to their replacement value or accident risk. Additionally, vans with modifications like shelving or refrigeration units may face higher premiums due to increased repair costs or theft risks. Including public liability insurance, protects against third-party injuries during deliveries and daily operations.
Insurance factors for EVs in Ireland
Commercial EVs are gaining traction in Ireland. New electric car registrations in Ireland increased by 29% in March 2025 compared to the previous year[3]. The government has also introduced grants for EVs to encourage the development of a more sustainable transport system in Ireland.
However, insuring electric vans involve specific considerations unique to their technology and usage. Here are the key points to understand:
High battery replacement costs
The battery is not only the most expensive component of an EV but also affects how insurance companies determine premiums. Replacing a battery after an accident is expensive, and the increase in battery-related claims may increase the premiums higher for businesses using EVs.
Specialised parts and repairs
Specialised EV parts are more expensive than traditional van parts. Businesses operating with EVs may face higher premiums due to the complexity of repairs and scarcity of competent technicians.
Limited data for risk assessment
EVs are an emerging trend in Ireland’s commercial sector. Insurers have limited historical data for comprehensive risk assessment and businesses may face higher premiums as a precautionary measure from the insurer’s side.
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Government grants and incentives for commercial EVs in Ireland
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What should businesses consider when purchasing electric vehicles?
Overall costs
EVs in Ireland benefit from government grants, low road tax and reduced fuel and maintenance costs. However, insurance may be higher due to expensive batteries. Installing tracking devices and safety features can help reduce premiums.
Business operations
EVs offer various battery ranges. Businesses should consider models that meet their operational and payload needs and invest in effective charging infrastructure to ensure smooth fleet management.
Environmental impact
EVs generate zero tailpipe emissions, helping businesses achieve sustainability goals and attract eco-conscious customers.
Cyber threats
Logistics firms are increasingly targeted by cybercriminals seeking shipment data. Modern vans and EVs, which rely on software, present potential hacking entry points.
How can Gallagher help?
The commercial vehicle industry is undergoing rapid changes in Ireland. The emergence of EVs, the widespread and growing use of LCVs, and grants and incentives open new opportunities for businesses to expand their operations.
Operators need to protect their services with the right risk mitigation strategies and relevant insurance. Investing in technology can help reduce the likelihood of accidents, thefts and cyber-attacks, as well as help to reduce insurance premiums.
Our specialist team will help businesses protect their assets with the right coverage, allowing van operators and owners to focus on what matters most — their customers and operations.
[1] Cuttle, Eoin. “Light and Heavy Commercial Vehicle Sales Increase in 2024,” CVWorkshop.ie, 2 Jan 2025.
[2] Araullo, Kenneth. “Telematics Use Grows in Insurance as Fleets Report Fewer Claims, Crashes – SambaSafety,” Insurance Business, 30 Oct 2024.
[3] “New Car Registrations: Increased 4% in Q1 2025; Battery Electric Increased 29%” SIMI, 01 Apr 2025.
[4] “Electric Vehicles Grant Values,” SEAI, accessed 20 Apr 2025.
The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.