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  • Writer's pictureTeam ArthaPurna

Commercial Vehicle Insurance

Updated: Aug 29, 2022


You and your family members may be able to make a living off of a commercial vehicle. Any accidental damage or theft of this could cause you to suffer significant financial losses or perhaps have to shut down your business. Living with such uncertainties is very risky, so it's necessary to get an insurance policy to reduce the risk and uncertainty.


In order to cover losses and damages to commercial vehicles and their respective owner-drivers, commercial vehicle insurance is a special type of motor insurance. This may include losses and damages from mishaps, collisions, natural disasters, fires, etc. All businesses are required to purchase commercial vehicle insurance for all of their vehicles, including auto-rickshaws, taxis, school buses, tractors, commercial vans, and trucks, among others.


Why vehicle insurance?

  • It is imperative to obtain commercial car insurance if your company owns one or more vehicles. This insurance will financially shield and defend your company from any losses and damages brought on by your vehicle(s), its users, and other third parties.

  • A commercial vehicle insurance can ensure your stakeholders and passengers that they will always be protected and covered for if your major line of business involves the use of cars, such as a regular taxi service or a private school bus.

  • It is required by law that you at the very least have Liability Only coverage in place, which covers third parties against any losses and damages that your business vehicle may cause.


Types of Commercial Vehicles Covered ;-

  1. Passenger Carrying Vehicle Insurance

Insurance expressly for vehicles, such as taxis, cabs, auto rickshaws, school buses, private buses, etc., that frequently transport one or more passengers. As they transport several passengers each day, passenger-carrying vehicles, particularly school buses and regular taxis, have a significant amount of obligation. The lives and livelihoods of a significant portion of India's population depend on operating these cars. In the event of any unfavourable events, a commercial vehicle insurance guarantees that they will always be protected against losses.


Any commercial vehicle used to transport passengers from one location to another is protected by a passenger carrying vehicle insurance, a sort of commercial vehicle insurance coverage.


This passenger carrying vehicle insurance shields the car from losses and damages that might occur in the event of a fire, natural disaster, or other unanticipated circumstances.


Passenger carrying vehicle types covered include:-

  • Buses: A passenger carrying vehicle insurance policy covers buses used to transport passengers from one location to another, including school buses, private tour buses, and others.

  • Auto Rickshaws: This regulation is applicable to all auto rickshaws used for transportation of persons from one location to another.

  • Taxis, cabs, and commercial vehicles: These types of vehicles, as well as your standard cab, ola, and other private automobiles used for commercial or public transportation, may be covered by insurance for passenger carrying vehicles.

  • Vans: This policy also covers vans used for business purposes, including private tour buses and school vans.

What makes a passenger carrying vehicle insurance necessary?

  • Protection Against Unexpected Losses: A passenger carrying vehicle insurance helps cover these unforeseen losses and guards your company from being held responsible for them, whether they are caused by a natural disaster, accident, collision, or even a fire.

  • Adherence to the Law: According to the Motor Vehicle Act, all cars, including those used for business, must carry at least a basic third-party insurance policy. This policy helps to protect one from losses and damages caused to any third-party, such as a person, property, or vehicle.

  • Owner-Driver Covers: When you insure your commercial vehicle with passenger-carrying vehicle insurance, you are protecting not only the automobile but also the owner-driver.

  • Passenger Protection: When purchasing a passenger vehicle, one may choose to include coverage for their passengers. By doing so, they are demonstrating that they are a responsible company that considers all of its stakeholders as well as themselves.


2. Goods-Carrying Vehicles Insurance

Vehicles that often deliver items from one location to another. Trucks, tempos, and lorries are the main examples of them.


Vehicles that transport goods typically have a huge size, which puts them at a lot of risk. A business vehicle insurance policy covers the owner-driver of the vehicle and the vehicle from losses that may result from accidents, natural disasters, or other unfortunate circumstances in addition to covering damages and losses to third parties.


If your company often employs trucks to move goods from one location to another, commercial vehicle insurance also covers losses from any loss or damage to items that may result from events like fires, accidents, or natural disasters.


What is insurance for goods-carrying vehicles?

A goods carrying vehicle insurance, as its name suggests, is a sort of commercial vehicle insurance created to safeguard business vehicles used to transfer products from one location to another. A goods carrying vehicle insurance can provide coverage for losses and damages during unforeseen events including accidents, collisions, thefts, natural disasters, and fires because these vehicles are significantly more vulnerable to risk.


Goods Carrying Vehicle types covered include:

Depending on the nature of the various enterprises in India, there are many distinct types of goods-carrying vehicles. Typical examples of goods-carrying vehicles include the following:

  • Trucks - There are many various sizes and shapes of trucks. from little trucks that provide everyday necessities to big trucks that move furniture and appliances. Any kind of truck that transports goods may be protected by a commercial insurance policy.

  • Tempos - Tempos are frequently used for delivery and transportation of goods within the city and are relatively smaller than trucks. The same may also be protected by a goods-carrying vehicle insurance policy.

  • Cargo autos, sometimes known as three-wheel vehicles, are compact vehicles designed for hauling small loads and are frequently used for city deliveries. They are less at risk than trucks and trailers because they are smaller in size. However, they can still be protected completely and with the least amount of financial damage by a goods-carrying vehicle insurance.

  • Trailers are big cargo-carrying vehicles that are frequently utilized across the nation to move heavy products. Given the risk involved, it is practically required to insure them with a goods-carrying vehicle policy.

  • Tippers - Tippers are a class of heavy-duty and cargo-carrying vehicles that are frequently used to move construction-related supplies.


3. Miscellaneous & Special Vehicles Insurance

In addition to trucks, buses, and taxis, there are numerous additional vehicles that are frequently used in and by businesses. Specialized vehicles used in farming, mining, and construction, among other things, may be some of these.


Any losses and damages brought on by the insured vehicle and its owner-driver will be covered by the business vehicle insurance for the same.


It is always a safer idea to insure these cars with commercial vehicle insurance given their size and investment. By doing this, the company or lone proprietor will reduce their risk and safeguard themselves from any monetary damages that might result from unexpected accidents.


Add-ons available with Commercial Vehicle Insurance :-

  1. Consumable Cover: Your commercial vehicle will receive protection beyond what is typically provided by a consumable cover. In the event of an accident, it will cover the expense of small parts for your car, such as screws, engine oil, and grease.

  2. Depreciation of Parts Protection: Because of wear and tear, your car's value can decrease over time, and any claim will typically take this amount into account. This add-on makes sure that, in the event of an accident, any replaced vehicle parts (such as rubber or fiberglass parts) would be compensated for depreciation.

  3. Engine and transmission Protect: In an accident, the engine or gearbox of your car may sustain damage as a result of things like water ingress or lubricating oil leaks. The consequential damages that result from the accident (but because of it) will also be covered by this add-on, such as engine damage from hydrostatic loss, which is not covered by a regular policy.

  4. Roadside Assistance, also known as Breakdown Assistance: Everybody occasionally needs a little help! With our breakdown support add-on, you will have the advantage of receiving assistance around-the-clock whenever your car breaks down while you're driving, whether it's because of an accident, flat tyres, a failing battery, or something else else.

  5. Loss of Income: Many people depend on their vehicles for work. This add-on aids in making up for any income you might lose while your business vehicle is out of commission for repairs after damage.

  6. Charges for additional towing: Your car will need to be towed to a garage after an accident so that it may be fixed. This add-on will pay for any additional costs you may incur as your car is relocated from the accident scene to the closest garage or safe location.

  7. Protection from EMI: If your vehicle is financed and is involved in an accident, it will need to be repaired, which could result in a loss for your company. You will receive recurring payments through this add-on to be made to the financier of the car listed in our records.

  8. Coverage for Personal Accidents: Since having a personal accident cover is required by law, you can incorporate one in your commercial insurance coverage plan if you don't already have one. This offers protection in the event of an unfortunate accident for physical harm or death to the owner-driver.

  9. Unnamed PA Cover: We pray it never does, but if it does and there is an accident and something unfortunate occurs to the individual sitting next to you in the car, this insurance is a backup plan to cover the same.

  10. Legal Responsibility: With this coverage, you are shielded from any legal responsibility that may be brought against you as a result of a harm you caused to a client or an employee.

  11. IMT 23: Even if the vehicle is only partially damaged, this policy helps pay for losses or damages to lamps, tyres, tubes, mudguards, bonnets, side part bumpers, headlights, and paintwork.

  12. Electrical Add-Ons: This insurance will cover electrical accessories that have been installed in a car that are not original equipment by the manufacturer.

  13. Accessories Not Electrical: This cover aids in covering any non-electrical accessories you may have installed in your car but which are not original equipment by the manufacturer in the event of damages or losses.

  14. Compulsory Deductibles & Special Exclusions: Every loss entails a set sum that you must pay as your portion of the loss, known as the mandatory deductible. Additionally, this will assist in lowering your premium. If your vehicle is entirely damaged, this will also cover the loss of or damage to lamps, tyres, tubes, mudguards, bonnets, side part bumpers, headlights, and paintwork.


What is not included?

Equally crucial is understanding what your commercial vehicle insurance policy does not cover so that there are no unpleasant surprises when you file a claim. As examples, consider the following:

  • Own Damages for the Holder of a Third-Party Policy

Damages to one's own car are not covered by a third-party liability only policy.

  • Without a licence or while intoxicated

If the car's owner-driver is intoxicated or operating the vehicle without a valid licence.

  • Contributory Negligence

Any damage brought on by the driver's contributory negligence (for example, driving through a flood that has already started)

  • Consequential Damages

Any harm that is not a direct outcome of the accident or natural disaster, such as indirect losses like lost profits or diminished market value.


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