What is Commercial Vehicle Insurance


24 Jul 2023

Commercial Motor Vehicle Insurance policy is designed especially for those business owners who have their vehicles being used for business purposes.

It comprises of both: the vehicles bought for business use or any personal vehicles that are being used by the business. This policy covers vehicles such as work vans, dump trucks, cabs, delivery trucks, staff vehicles, food trucks, company cars, and more. The insurance ensures liability and collision coverage. The third-party liability coverage helps in paying for repairs and medical costs towards third parties for bodily injuries, including death and property damage caused by an accident which includes people not in the insurance contract, while the collision coverage pays for any repairs and medical costs that you or your vehicle incurs.

Commercial vehicle insurance is especially beneficial for those businesses that rely on vehicles to operate in the commercial or industrial sectors. As per the Indian Motor Vehicle Act of 2019, it is mandatory to buy at least third-party liability vehicle insurance. When choosing a commercial vehicle insurance policy online, one must look for the covered vehicle types such as commercial auto insurance and commercial motor insurance as the insurance may vary based on it. Additionally, the policy can save you from having to juggle among multiple insurers, especially, when you are in the middle of your day-to-day business operations.

Some other things to double-check include the basic coverage options for liability and collision, maximum and minimum limits of the policy, deductible amounts.

Vehicles covered in Commercial vehicle Insurance

Passenger Carrying Vehicles

Vehicles such as taxis, cabs, auto-rickshaws, school buses, private buses etc., that generally carry at least one passenger are known as passenger-carrying vehicles. These passenger-carrying vehicles are covered under commercial vehicle insurance, which secures them against losses in case of any unforeseen circumstances.

Goods Carrying Vehicles

Vehicles primarily used for carrying goods to transport from one place to another are known as goods carrying vehicles and mostly include mini trucks, trucks, tempos, lorries etc. Since these vehicles are large in size, they carry more risk. Commercial vehicle insurance covers the damages to third party vehicle or own vehicle and the damages to the goods as per the policy coverage.

Miscellaneous & Special Vehicles

There are many types of vehicles used for business or commercial reasons besides trucks, taxis, buses, cabs etc. The vehicles may include special vehicles used for mining, farming, construction etc. Commercial vehicle insurance shields the insured vehicle from any mishaps and losses caused to and by the vehicle and its perspective driver.

Benefits of Commercial Vehicle Insurance

Some benefits of Commercial Vehicle Insurance include:

• Commercial vehicle insurance can be written off as a business expense and can be counted as tax-deductible.

• This type of insurance plan can be bought in bulk by travel agencies or car rental services etc., which makes the process easier accompanied by an affordable premium amount.

• It safeguards you from the financial burden caused by the damage due to accidents.

• It also provides for medical costs of the injured, extending up to any other person uninsured or underinsured, driving the vehicle with consent.

• It has a provision of the settlement amount for losses incurred due to unforeseen events such as theft, fire, vandalism, terrorist attacks, and natural calamities, etc.

• It covers the lawsuit and legal fees that are brought against you.

• It has extra benefits for any deaths caused during accidents.

• When there is no claim within the policy period, no claim bonus is awarded during renewals.

• It gives financial assistance to compensate for third-party penalty claims.

• It also offers towing assistance in case you find yourself stranded in the middle of nowhere with car batteries have run out.

If you are searching for a car insurance plan, choose from a selection of car insurance products and services with Kotak General Insurance.

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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.