What is Commercial Vehicle Insurance policy? Benefits, Work

What is Commercial Vehicle Insurance policy, type, benefits, Features, Inclusions, and Exclusions

Commercial auto insurance is required for vehicles such as trucks, cars, tempos, vans, etc. that you own or use for running any business or profession. If there is an accident with your vehicle, then you can get coverage for the damage, and you do not suffer much financial loss. So let us know what commercial vehicle insurance is i.e., commercial auto insurance.

What is Commercial Vehicle Insurance?

A commercial vehicle insurance is a customized motor insurance policy that covers a commercial vehicle and the respective owner or driver for damages and loss caused to or by it. It provides coverage for injury or death to both the parties involved in the accident.

This insurance policy provides coverage for loss or damage caused due to natural calamities, fire, man-made calamities etc. It is mandatory for all businesses/business owners to buy a commercial vehicle insurance for their commercial vehicles plying on the road like auto-rickshaws, trucks, lorries, cabs, school buses etc.

Features Of Commercial Vehicle Insurance

Following are the main features offered under commercial vehicle insurance:

  • Stay stress free from monetary shocks due to liabilities.
  • Commercial vehicle insurance policy provides cover for liabilities in case of any injury or accident.
  • In case of a personal accident, the driver and the owner are covered.
  • Comprehensive coverage is provided to both public and private carriers including vehicles carrying special types of goods.
  • Third party person/vehicle/property damages are covered.

Types Of Commercial Vehicle Insurance

Commercial vehicle insurance is generally of two types, which are as follows:

Comprehensive Commercial Vehicle Insurance

Comprehensive insurance provides complete protection to your commercial vehicle against any adverse circumstances. This policy protects your commercial vehicle against uncertainties like damage, fire, theft, robbery, flood, earthquake etc. In addition, a comprehensive vehicle insurance policy provides cover for third party property as well as for those injured in an accident. 

Third-party Liability Commercial Vehicle Insurance

It is mandatory by law for any commercial vehicle owner to have third party liability insurance. This insurance policy provides protection to a third party property, person or vehicle. This insurance policy also provides coverage in case of injury or death of a third party person following an accident.

Since commercial vehicles are heavy duty vehicles carrying goods, their weight is increased so covering them under third party insurance should be of top priority.

Why is there a need for commercial vehicle insurance?

  • If vehicles are used in your primary business, such as regular cab service, private school buses, auto rickshaws, a commercial vehicle insurance will assure your stakeholders and passengers that they will always be protected and covered.
  • It is mandatory under the Motor Vehicles Act to have at least one liability policy, which protects third parties against any damage and loss caused by your commercial vehicle.
  • If you have a business and have multiple vehicles, then you must have commercial vehicle insurance. Which will protect and cover your business financially against any damage and loss caused by your vehicles and the people using it.

Commercial Vehicle Insurance Inclusions

Commercial vehicle insurance policy compensates for personal, medical and financial losses that occur due to theft, accidents and damages caused by natural calamities.

There are many commercial vehicle insurance companies, which provide customized commercial vehicle insurance policies to meet the various needs of their customers.

Here is a list of benefits that a commercial vehicle insurance policy provides:

  • Riots and strikes
  • Flood and storm
  • Crash (via external)
  • Fire, self-ignition, explosion or lightning
  • landslides and rock slides
  • Terrorist activity
  • Commercial vehicle third party insurance provides cover in case of an accident involving your insured commercial vehicle and a third party vehicle. It covers damage or loss caused to third party property, vehicle, bodily injuries and death.
  • Earthquake
  • Theft, vandalism and burglary
  • Personal accident claims are also covered under this policy. It covers permanent total disability/accidental death of the driver and owner.

Commercial Vehicle Insurance Exclusions

Commercial vehicle insurance does not cover any claims arising out of the following situations:

  • Accident occurred while driving under invalid driving license or under the influence of alcohol.
  • Breakdown of commercial vehicle.
  • danger of war, nuclear danger
  • Electrical and mechanical breakdown, breakdown or failure
  • If the policy is not active at the time of accident or loss.
  • civil war losses

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