Suppose you own a business that uses vehicles for commercial purposes. In that case, it will make a lot of sense to protect your business from unforeseen expenses due to accidents that could lead to the hospitalisation of your drivers, damage to your vehicles, or third-party property. One way to protect your business is by taking up commercial vehicle insurance. This post reveals all you need to know about this type of motor insurance, including the coverage options available and what is not covered under this policy.

What is commercial vehicle insurance?

Commercial vehicle insurance is a policy offered by an insurance company that caters to the motor insurance needs of small, medium, and large business enterprises with vehicles explicitly used for commercial purposes. Typically, a commercial vehicle may be registered in the name of a business or an individual, like in the case of a car used for a privately run taxi service. The Motor Vehicle Act of 1988 requires that business owners purchase commercial vehicle insurance coverage that protects them from damage or loss of their vehicles due to myriad factors.

What is covered under commercial vehicle insurance?

Insurance companies offer several coverage options to protect the interests of commercial vehicle owners. The typical coverage for commercial purposes includes the damage or loss of an insured vehicle as a result of the following reasons:

  • Natural Disasters: These includes a hurricane, flood, storm, typhoon, earthquake, and so on.
  • Man-made Disasters: You have calamities like fire, burglary, theft, housebreaking, ignition issues, riots, strikes, vandalism, terrorism, and so on.

Coverage from death and permanent disability to policyholder and driver

Commercial vehicle insurance coverage also includes compensation to the policyholder and registered driver of the insured commercial vehicle in the event of an accident leading to death or permanent disability. 

Third-party liabilities and commercial motor insurance coverage

Commercial motor insurance also protects from third-party liabilities. If your insured commercial vehicle causes bodily harm or death to a third party, your insurance company will compensate the third party on your behalf. 

Commercial vehicle insurance add-ons

Similar to a comprehensive car insurance policy, insurers of commercial motor insurance plans offer riders or add-ons. The provision of towing services in the event of a vehicle malfunction may be offered as either part of a standard coverage or as a rider depending on the insurance company suggesting the insurance plan. Apart from roadside assistance, some other add-ons you could take on include engine cover and zero depreciation.

What is not covered under commercial vehicle insurance?

Commercial motor insurance does not cover the following:

  • The wear and tear of the insured commercial vehicle.
  • Breakdown of insured vehicle due to electrical or mechanical faults.
  • Claims are filed for damage or loss caused by ionising radiation or a nuclear disaster.
  • Claims are filed for damage or loss where the insured vehicle has been driven outside the limits of specified geographical zones agreed in the policy.
  • Any other claims that are not covered in the policy.

In conclusion 

You can also buy this policy online, but you are always advised to compare the plans several insurers offer before deciding which policy to buy.  Commercial vehicle insurance can be purchased directly from an insurance company or via the help of an agent or broker. You can also calculate your expected commercial motor insurance premium on the online platform of top insurers in India. 

To calculate the premium, you will be expected to provide details of your vehicle, including the Insured Declared Value (IDV), Age, type and model, driving history, place of registration, fuel usage, claim history, and choice of coverage. Most insurers also allow for online renewal of policies and the filing of claims on commercial motor insurance, amongst other things.