Insurance For Commercial Vehicles

Why Should You Buy Insurance for Commercial Vehicles?

Here are 3 important reasons behind buying insurance for commercial vehicles -

• To Protect Yourself From Damage And Financial Liabilities

  A commercial vehicle is part of your business family. It is always on the road, sometimes even for 24 hours. Its frequency of travel is higher than private vehicles, which in turn, exposes it to a greater risk of damage. Any damage to a commercial vehicle puts the vehicle off-road, thus having an impact also on the business and its revenues. It is hence important to cover commercial vehicles with insurance, It financially covers your business against any losses due to major damage to your vehicle.

• To Protect Your Business From Any Third-Party Liabilities.

  Commercial vehicles run for long hours and across different kinds of routes, areas, and cities. These vehicles are often driven by paid drivers who may cause injury to someone on the road, or ram the vehicle to an expensive property/asset. As per law, your business will be liable to pay damages for injury or damage based on liability awarded by the court of law. Such losses may severely affect your business and its profitability. Through third-party insurance, you are covered for unlimited liability on death/injuries and liability up to Rs. 7.5 lakhs in case of damage to property.

• A Third-Party Insurance Cover is Legally Mandatory

  Besides the liability explained above, It is also compulsory under the law that every vehicle (be it commercial or private) on the road must have at least third-party insurance. If you don’t comply with these rules, you can face legal repercussions like fines, etc. that again be an unnecessary loss for your business.
   

Types of Plans for Commercial Vehicles

Commercial vehicles and the policies available can be of various types. Let’s see.

• Insurance For Passenger Carrying Vehicles

  Passenger carrying vehicles are intended to carry one or more passengers and include cabs, taxis, private buses, school buses, auto-rickshaws, etc. It is important to get such vehicles insured because they have a huge responsibility towards the passengers and the coverage will safeguard them against any unfortunate circumstances.

• Insurance For Goods Carrying Vehicles

  Goods carrying vehicles, as the name suggests, are used for the purpose of transporting various goods from one place to another. They include lorries, trucks, tempos, etc.

  Given their large size, they are prone to higher risks. Buying insurance for a goods carrying vehicle not only safeguards the third party from loss or damage but also protects the owner-driver and the vehicle from natural calamities and ill-fated situations.

  This insurance is a must-have for businesses that regularly use such vehicles to transport goods.

• Insurance for Miscellaneous And Special Vehicles

  All vehicles that are used for commercial purposes, other than the ones listed above, are classified under miscellaneous and special vehicles. They include vehicles used for farming, construction, mining, etc.

  An insurance policy for such vehicles will -

1. Provide financial coverage for losses caused by and to the vehicle.
2. Protect the owner-driver against unfortunate circumstances.
    

What Situations are Covered By Insurance for Commercial Vehicles?

Insurance for commercial vehicles will protect the insured person against any damages or losses caused by -

• Fire accidents like explosions, self-ignition, or lighting
• Strikes and riots
• Theft
• Natural calamities like earthquakes, floods, storms, hurricanes, inundation cyclones, typhoons, hailstorms, landslides, rockslides, etc.
• Accidents
• Malicious acts
• Terrorist activities
• Road, rail, inland waterway, elevator, or air transit

Example : Kamal, the owner of an auto-rickshaw, has parked his auto-rickshaw in front of a factory. There was a huge strike by the factory workers and they damaged all the vehicles parked near the factory by breaking their handles, windows, wipers, windshields, etc. Kamal’s auto-rickshaw got damaged too. But, since he owns an insurance policy for his commercial vehicle, the repair cost of the same will be covered by it.
 

What Situations are not Covered by Insurance for Commercial Vehicle?

Insurance for commercial vehicles doesn’t cover loss or damage caused by

• Depreciation
• Wear and tear
• Consequential losses
• Failures or breakages
• Mechanical or electrical breakdown
• Damages to accessories by burglary
• Damages caused due to overloading or strain of the commercial vehicle
• Accidents or damages caused to the vehicle under the influence of alcohol or drugs
• Any damages caused to the tyres or tubes unless the vehicle insured is damaged at the same time. In this case. the liability of the company shall be limited to 50% of the replacement cost.

Example : Rohit, a taxi driver, hit an electric pole when driving his taxi late at night. This caused significant damage to the bonnet, headlights, and windshield. He made a claim under his insurance plan, but it was discovered that he has been under the influence of alcohol when the incident happened. Hence, his claim was rejected and he received no compensation for the repair costs.