Commercial vehicles play a crucial role in a business’s logistics operation as key components responsible for keeping things running smoothly. Therefore, any damage or breakdown of these vehicles would disrupt business operations and mean possible financial losses.
Commercial vehicle insurance can help you deal with difficult situations by mitigating the impact of breakdowns and damages.
Keep reading to understand what commercial auto insurance means, its key features, benefits, and the types of commercial vehicle insurance policies available in India.
Understanding Commercial Vehicle Insurance
Commercial vehicle insurance is a specifically tailored motor insurance policy that covers vehicles used for business purposes. Businesses typically own or operate these vehicles to transport goods, services, or passengers as part of their professional operations.
The policy protects against various risks associated with the operations of commercial vehicles, including man-made calamities like theft, riots, strikes, damage in transit by road accidents, etc., and natural calamities like fire, earthquake, flood, explosion, etc.
Moreover, similar to privately owned vehicles, commercial vehicles must have third-party insurance per the Motor Vehicles Act. Failing to insure these vehicles attracts hefty penalties.
Whether you buy commercial vehicle insurance online or offline, ensure that you choose a policy well-suited for your category of vehicle that meets all your requirements.
Key Features of Commercial Vehicle Insurance
Commercial vehicle insurance policy is packed with salient features. These include:
- Liability Coverage: Provides monetary protection and covers bodily injuries and property damage you may be responsible for if your commercial vehicle is involved in an accident.
- Underinsured/Uninsured Motor Coverage: Provides cover in case the driver of the insured business vehicle is involved in an accident and has no or insufficient insurance.
- Comprehensive Coverage: Pays for damages if the commercial vehicle involves vandalism, theft, or natural disasters.
- Collision Coverage provides coverage in case the vehicle damages from a collision, regardless of who is at fault.
- Medical Payments Coverage: This policy provides financial cover for medical expenses for the passengers and driver of your business vehicle, regardless of who is at fault.
Why Commercial Vehicle Insurance Policy is Important for Your Business?
The need for commercial vehicle insurance can be explained as follows:
- Commercial vehicle insurance, specifically third-party insurance, be it tempo, truck, or taxi insurance, is mandatory in India to ensure legal compliance.
- Besides legal protection, liabilities such as third-party/person/vehicle/property damage cover can help you remain stress-free from monetary setbacks.
- Comprehensive commercial vehicle insurance also offers personal accident coverage, which covers the bodily injuries or death of the driver and the owner.
- Commercial vehicle insurance assures stakeholders, drivers, and passengers that they are protected if things go south.
- If your business mainly involves plying passengers, commercial vehicle insurance helps your business avoid financial liability due to injuries or damages to these passengers.
Types of Commercial Vehicle Insurance Policies
In India, majorly two types of commercial vehicle insurance policies are available. These include:
- Third-party Liability Commercial Vehicle Insurance Policy
According to the Motor Vehicles Act of 1988, every commercial vehicle owner must purchase and insure his vehicle with third-party insurance. This insurance protects the policyholder against legal liabilities arising from damages or injuries caused to a third person or property.
Since this is a third-party insurance policy, it does not provide coverage or benefits to the vehicle or the policy owner. Most third-party insurance policies provide 100% compensation to third parties in cases of permanent total disability or death.
- Comprehensive Commercial Vehicle Insurance Policy
This insurance policy is not mandatory by law and is entirely optional. However, most insurance experts advise covering your vehicle with a comprehensive commercial insurance policy as it provides complete protection under any adverse circumstances that may lead to an unwanted expense.
This insurance policy safeguards your commercial vehicle against damages from man-made and natural calamities like fire, theft, robbery, flood, earthquake, etc. It also covers the policyholder’s third-party liabilities arising from death, injury, or property damage caused to third parties by the insured’s vehicle.
Protecting your commercial vehicle with the right insurance policy is crucial as it safeguards your business against potential risks and liabilities. A comprehensive commercial vehicle insurance policy can provide the necessary protection for your fleet of automobiles, whether you own delivery vans, trucks, buses, taxis, or specialised vehicles.
Before you choose a commercial vehicle insurance policy, consult an insurance expert online. A professional can help you assess your specific needs and ensure that you have comprehensive coverage for your commercial vehicles.