Things You Must know About the Commercial Vehicle Insurance in India

This increased demand/dependence on commercial transport has given rise to various enterprises to fill the service gap. But when so many commercial vehicles are put on the road, the chances of unpleasant road accidents or events increase manifold.

As a business owner running a commercial transport business, it becomes essential for you to secure your vehicle against any potential damages arising out of various unpleasant happenings. It is where commercial vehicle insurance comes into the picture.  

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What is Commercial Vehicle Insurance?

Commercial vehicle insurance is a type of motor vehicle insurance that covers your business vehicles against any losses/damages arising from unfortunate events.

If you own cabs, trucks, school buses, or other commercial transportation means, you must get them insured under a comprehensive commercial vehicle insurance policy. This insurance will ensure you aren’t subjected to intense financial strains arising from damages/losses caused to third-party individuals or their properties.

While looking for commercial vehicle insurance, you can come across a comprehensive and liability-only plan. The former insurance plan provides better coverage as it covers third-party damages and damages to the own vehicle and the owner-driver. A liability-only plan covers third-party individuals and properties; hence, offering limited coverage. If you own multiple commercial vehicles that regularly ply on the road for hours, you should look for comprehensive commercial vehicle insurance for the best coverage. 

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Inclusions under Commercial Vehicle Insurance

Having an explicit knowledge of the inclusions will help you set realistic expectations from day one. Depending on the insurance you take, you will get the following standard inclusions:

For Third-Party Commercial Vehicle Insurance

A third-party or liability only commercial vehicle insurance will offer you coverage against:

• Loss/damage caused to a third-party individual due to an accident involving your vehicle.
• Loss/damage caused to third-party property(s) due to an accident involving your vehicle.

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For Comprehensive Commercial Vehicle Insurance

In addition to the inclusions covered in third-party commercial vehicle insurance, comprehensive commercial vehicle insurance also protects you against:

• Loss/damage caused to your secured vehicle due to theft, towing disabled vehicles, road accidents, natural calamity, or riots.
• Loss/damage caused to the driver or owner due to an accident, natural calamity, or other unfortunate events.  

Besides these inclusions, you can extend the scope of coverage of your commercial vehicle insurance by buying relevant add-ons/riders. Though the add-ons can vary from one insurance provider to another, you can generally get an upgrade for the following in exchange for an extra premium:

• Consumable Cover: This add-on will cover the expenses of your commercial vehicle’s nuts, screws, engine oil, and other pieces or parts in case of an accident.

• Emergency Breakdown Assistance on Roads: If your commercial vehicle breaks down in the middle of the road due to engine malfunctioning, accident, or any other reason, this add-on will help you by getting you road assistance at any time of the day or night.   

• Depreciation Cover for Vehicles Parts: Commercial or non-commercial, all vehicles are subject to depreciation, and so are their parts. If you don’t want your claim to be calculated on the vehicle’s depreciated value, you should get an add-on that protects you against depreciation on vehicle parts. 

• Legal Liability: If you want to protect yourself from any legal suits arising from an injury caused to people working for you during work hours, this add-on is a must.

• Engine Protection: No comprehensive commercial vehicle insurance covers consequential damages. But if you take an add-on to protect your vehicle’s engine, you can claim the associated damages.

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Besides these add-ons, you can also come across various additional riders, depending on the insurance company you’re looking for the policies from. If you want to remain stress-free and don’t want any heavy financial strain to impact your business due to any of your commercial vehicles, it is best to go with comprehensive insurance with relevant add-ons.  

Exclusions under Commercial Vehicle Insurance

While commercial vehicle insurance covers you against most damages/losses, it is crucial to understand what it doesn’t cover. Knowing the exclusions from day one will save you from unpleasant shockers during claim settlement. If you’re taking comprehensive commercial vehicle insurance, you won’t be covered for any loss/damage for:

• Contributory negligence, i.e., breaking traffic rules, exceeding the speed limit in a bid to overtake another vehicle, driving on routes the vehicle doesn’t have a permit, letting a minor drive the vehicle, or other similar cases
• Driving the commercial vehicle without a valid driving license or driving in a drunken state
• Consequential damage

Besides the stated exclusions, you won’t be eligible for any claim if you forget to renew the commercial vehicle insurance on time and the accident occurs during the same duration.

Types of Vehicles Covered under Commercial Vehicle Insurance

The use of different types of vehicles for commercial purposes has given rise to speculations regarding the vehicle types eligible for commercial vehicle insurance. If you have any of the following types of vehicles, you can consider getting motor insurance for maximum safety:

1. Goods Carrying Vehicles

Vehicles carrying goods from one destination to another for purely commercial purposes are eligible for commercial vehicle insurance. These vehicles are usually large in size and spend most of their time plying on roads. Vehicles like, tempos, large vans, trailers, etc., are known to carry bulk loads on most of their trips, and they travel on highways, chaotic city roads, and other trails for hours.

It makes vehicles more prone to road accidents. However, if you are owning a goods carrying vehicle you can go for goods carrying vehicle insurance from a reputed insurance company, you will never have to worry about loss/damage arising from accidents, theft, natural calamity, or other event mentioned in the policy papers.      

2. Heavy vehicle

Besides goods carrying vehicles, you can also find large vehicles like tractors, big trailers, cranes, bulldozers, etc., being used in farming, construction, mining, and other industries. These vehicles can also be covered under commercial vehicle insurance. Since these vehicles are more prone to accidents due to the nature of the activity, it is best to get them insured before putting them to use on sites or roads.

Heavy vehicles are known to carry massive loads at once, and even a tiny mistake can make these vehicles prone to accidents, causing damages worth lakhs or even crores. If your business involves the use of heavy cranes, tractors, bulldozers, or any other heavy-duty vehicle on a daily basis, you shouldn’t take the risk of substantial financial damages. Get all your heavy vehicles insured under commercial vehicle insurance, so you can become stress-free and focus on other important work areas. .

3. Passenger Carrying Vehicles

Passenger carrying vehicles fall under commercial vehicle insurance If you use vehicles like school buses, auto-rickshaws, taxis, private buses, regular cabs, and other similar vehicles for securely carrying passengers from one place to another in exchange for money, you can get these vehicles covered under passenger carrying vehicle insurance.

This insurance will save you against financial setbacks in the long run due to the losses/damages caused to any third-party, own vehicle, owner-driver, or third-party property due to an accident involving your vehicle.

Commercial vehicle insurance is a boon for entrepreneurs who run commercial transportation businesses. With this insurance, they can easily safeguard themselves and their company from possible financial losses that could otherwise disrupt the entire budget. 

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Get Your Vehicles Insured for Smooth Functioning of Your Business

Getting comprehensive commercial vehicle insurance for your business vehicles is an easy way to protect yourself and your business against financial drain arising from loss/damage caused to/by your vehicles. No matter how skilled drivers you hire, the probability of road accidents cannot be neglected, and so does the attached financial burden.

If you want to work stress-free by focusing entirely on your business operations, get all your vehicles insured under commercial vehicle insurance at the earliest. Once insured, the insurance company will take care of any potential damages/losses caused to/by your vehicles while you can focus on your business.