If your any bussiness you need public liability even if its manufacturing bra's and undies, so just cause its a car hire bussiness doesnt exclude you from paying insurance.
And if you thing that you can get away with doing and formal event...just wait till somthing goes wrong and as much as you tell them you will do it cheaper for cash when the poop hits the fan people will talk, and insurance companies will look for any avenue not to pay.
So I suppose in todays enviroment it doesnt pay to cheat, you will get caught eventually. lUvhEv