What is Covered Under Commercial Vehicle Insurance and Why Your Business Needs It?

New Delhi : Businesses of all sizes rely on commercial vehicles. From delivery trucks to service vehicles, they keep operations running smoothly. However, they are at risk of accidents, theft, and breakdown if used significantly. 

Commercial vehicle insurance is a policy that discusses several risks pertinent to operating commercial vehicles and provides financial assistance for damage, repair, and liability costs associated with these vehicles.

Keep reading to learn more about commercial vehicle insurance and its significance to businesses regarding coverage.

Types of Coverage Under Commercial Vehicle Insurance

A range of commercial vehicle insurance coverage options, such as tractor, bus, van and truck insurance, can protect your business vehicles. Here’s what is typically covered:

1. Third-Party Liability

● What It Covers: Liability insurance covers the costs if your business vehicle injures someone or damages their property.

● Why It’s Important: Third-party claims can financially harm you. Liability coverage takes care of these costs.

2. Own Damage Coverage

● What It Covers: This pays for vehicle damages caused by accidents, fire, vandalism, or other incidents.

● Why It’s Important: Commercial vehicles can be expensive to fix. It covers the damage costs to the vehicle.

3. Personal Accident Coverage

● What It Covers: This covers medical expenses when an accident happens and compensates drivers and employees.

● Why It’s Important: Personal accident coverage is essential to provide financial security to drivers or employees who use the vehicle regularly.

4. Theft or Total Loss Coverage

● What It Covers: This covers the loss if the vehicle is stolen or destroyed beyond repair.

● Why It’s Important: When losing a vehicle, a business takes a significant financial blow. If such losses occur, theft coverage provides you with compensation.

5. Natural Calamities and Fire Coverage

● What It Covers: This coverage covers natural disasters like floods, storms, earthquakes, and fire.

● Why It’s Important: Natural disasters can cause significant damage to human assets. This coverage ensures that you’re covered in these events.

6. Riot and Vandalism Coverage

● What It Covers: Riot, strike, or malicious act damages are covered by this insurance.

● Why It’s Important: Vandalism and riots are unpredictable. Having coverage gives peace of mind in these situations.

How to Choose the Right Commercial Vehicle Insurance?

To select the best commercial vehicle insurance, you should know your business needs. Here are some steps to help:

Step 1: Assess Vehicle Use: Determine how often and for what purposes each vehicle is used. More extensive coverage might be required for high-use vehicles.

Step 2: Consider Risks: Imagine how much your vehicle is exposed to. Consider the possibility of accidents, thefts, or harsh weather.

Step 3: Compare Policies: Coverage varies from insurer to insurer. Find the best match for your policies.

Step 4: Check Add-On Options: If you can afford it, consider add-ons such as roadside assistance, engine protection, and zero depreciation.

Step 5: Review Policy Terms: Read the terms carefully to avoid surprise when filing a claim.

Common Exclusions in Commercial Vehicle Insurance

While commercial vehicle insurance covers many risks, there are some common exclusions:

● Drunk Driving: Commercial vehicle insurance doesn’t cover accidents while under the influence of alcohol or drugs.

● Unlicensed Drivers: This excludes damages from an unlicensed driver whilst driving the vehicle.

● Intentional Damage: Damages done deliberately are not insured.

● Regular Wear and Tear: This excludes normal ageing and wear assumed over the vehicle's life.

Why Your Business Needs Commercial Vehicle Insurance?

When running a business, you have multiple risks and must protect your assets, including vehicles. Here’s why commercial vehicle insurance is a necessity:

● Financial Protection: Significant expenses can arise from vehicle accidents or damage. Therefore, insurance covers these costs.

● Legal Requirement: Commercial vehicle insurance is required in many countries, so staying current’s essential.

● Business Continuity: Insurance reduces your business’s financial disruption so that you can continue to operate even during an economic downturn.

● Protection Against Liability: If a business vehicle causes an accident, the insurance will pay for liability expenses, reducing legal risks.

Understanding these exclusions helps businesses understand when and when they are covered.

Businesses dependent on vehicles need commercial vehicle insurance. It covers many issues, including liability protection, repair costs, and more, creating solid safety from numerous perils. With the right policy cover, you can guarantee your business continuity and ensure your employees and assets stay covered.

Before making a choice, consider your needs, evaluate your preferences, and consider additional features of good insurance.