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Commercial Vehicle Insurance

We all know that commercial vehicles are huge assets to the modern business world. One would think, however, that individuals who own or operate those vehicles would have a fairly good grasp on the fact that they need insurance for them. Unfortunately, many companies and professionals do not understand the importance of commercial vehicle insurance coverage for their employees, nor do they know a lot about the topic itself. Not only will this hamper a company’s ability to run smoothly but it could also cost companies big amounts in fines and loss of revenue due to accidents involving their trucks and other vehicles.

To avoid these losses, we should begin taking a look at some key facts about commercial vehicle insurance so we can better understand what it is and how it helps businesses like our own thrive in the long run.

What is a Commercial Vehicle Insurance?

Commercial Vehicle Insurance coverage is a tailored auto insurance policy that covers losses and damages done by any commercial vehicle and its owner-driver. This might include losses and damages caused by accidents, crashes, natural disasters, wildfires, and so forth. All companies are required to have commercial car insurance policies for their cars, which include auto-rickshaws, taxis, school buses, trucks, commercial trailers, tractors, and many others.

Why should I Buy Commercial Vehicle Insurance?

Here are the reasons why you should consider getting commercial vehicle insurance for your company cars:

1. Financial Safeguard

Your company’s autos and trucks are essential to your business operations. If they are damaged or involved in an accident, the financial losses can be devastating. You need to add commercial vehicle insurance coverage to your existing personal auto policy to protect your fleet from unforeseen events. This not only limits your personal expenses in case your vehicle is involved in an accident but also helps you smoothly operate your business without worrying about a shortage of vehicles.

2. Peace of Mind

It stands to reason that in order for your company to conduct business efficiently, having a fleet of vehicles is just as essential. But with companies all over the world, there are bound to be times when accidents happen. When this happens, it’s important to understand what you’re entitled to after the fact in terms of compensation and damages. Commercial vehicle insurance plans protect businesses against losses caused by vehicles and drivers while they are being used on the job site or during transport and delivery.

3. Mandated by Law

It is required by the law that commercial vehicles must have a minimum of third-party liability-only coverage on board, and this covers third parties from every loss or damage caused by the insured commercial vehicle.

Who needs Commercial Vehicle Insurance?

Small-business operators who are using their cars for business activities, including such as delivering products and hauling equipment or materials, or who employ workers who use the car, must have a commercial auto insurance plan in place.

This covers independent contractors as well as self-employed individuals (even people who are operating part-time). Nevertheless, if you routinely drive for your company, regardless of whether they currently own the car, it is their obligation to insure the same for work-related operations.

Commercial automobile insurance is distinct from personal auto coverage, however, you may frequently combine the two to save cash. You could also bundle it with other forms of commercial coverage, such as general liability plans or commercial property insurance plans.

Commercial Vehicle Insurance Coverage

Here are the common inclusions of commercial vehicle insurance plans:

1. Damage or loss caused to a third-party property by the insured vehicle in case of a traffic accident

2. Damage or loss sustained by the insured vehicle in case of a traffic accident

3. Damage or loss sustained by the insured vehicle due to robbery or theft

4. Damage or loss sustained by the insured vehicle due to fire

5. Damage or loss sustained by the insured vehicle due to natural disasters like floods, hailstorms, and earthquakes

6. Death or injury sustained by the insured owner-driver in case of a traffic accident

7. Damage or loss caused by the insured vehicle while being towed

Note: This list contains the generic list of coverage inclusions. Make sure to contact your insurance provider for a more comprehensive list.

Commercial Vehicle Insurance Exclusions

Here are the common exclusions of commercial vehicle insurance plans:

1. Damage or loss caused to a third-party property by the insured vehicle in case of a traffic accident is not covered if only third-party liability coverage is purchased

2. Damage or loss sustained by the insured vehicle when the owner-driver is drunk or under any intoxication

3. Damage or loss sustained by the insured vehicle due to the owner-driver being negligent

4. Damage or loss sustained by the insured vehicle as a consequence of an accident

What are Commercial Vehicle Insurance add-ons?

Here are the common add-ons and riders of commercial vehicle insurance plans:

1. Consumable Cover

This consumable coverage will provide additional protection for your business vehicle. In the event of an unfortunate accident, it pays for the cost of your car’s parts and pieces, such as nuts, bolts, fasteners, engine oil, as well as grease.

2. Parts Depreciation Protect Cover

Due to use and tear, the worth of your car and its components might degrade over time, so the depreciation amount is normally removed from any auto claim. This add-on assures that
any replacement car parts (such as rubber or fiberglass components will be insured in the event of an unfortunate accident at the time of repairs.

3. Engine & Gearbox Protect Cover

In an incident, your car’s engine or gearbox may be damaged as a result of water ingress or a lubricating oil leak. This rider will assist in covering any consequential losses incurred due to the incident, such as engine damage caused by hydrostatic losses, that is not protected by regular insurance.

4. Roadside Assitance Cover

If your car breaks down on the highway because of an accident, flat tyres, a failing battery, or any other reason, you will enjoy the advantage of receiving help 24×7 from your insurance provider with the emergency breakdown assistance rider.

5. Loss of Revenue Cover

Vehicles are necessary for many people’s jobs. This add-on cover helps to reimburse you for any lost revenue that may happen while your business car is being fixed due to any loss or damage.

6. Additional Towing Expense Cover

If your car is involved in an incident, it must be hauled to a garage for repairs. The company will pay any additional fees you may incur while your car is being relocated from the scene of the incident to the closest workshop or safe location under this add-on cover.

7. EMI Protection Cover

If you have a loaned car that is injured in an incident and is waiting in a workshop for repairs, it might be a deficit for your company. You’ll be paid recurring EMIs to the lender of the car documented in the company’s records through this add-on cover.

8. Personal Accident Cover

If you don’t currently have a personal accident policy, you can incorporate it into your existing commercial insurance coverage because having valid personal accident insurance is required by law. This offers coverage for the owner-physical driver’s harm or fatality in the event of an unfortunate incident.

9. Unnamed Personal Accident Cover

If anything occurs to the individual sitting with you, the owner-driver, in the car during an unforeseeable incident, this coverage will cover it.

10. Legal Liability Cover

This coverage protects you from any legal responsibility that may occur as a result of an accident to one of your workers or someone operating for you.

11. IMT 23 Cover

This insurance cover assists in covering any loss or damage to lights, tyres, mudguards, tubes, bumpers, bonnets, headlights, or paintwork throughout all circumstances, even if the insured car is temporarily harmed.

12. Electrical Accessories Cover

This coverage is for people who have installed any electrical item in their car that is not included in the manufacturer’s design.

13. Non-Electrical Accessories Cover

If you’ve installed any non-electrical equipment in your car that isn’t part of the car company’s design, this cover will assist protect such extras in the event of loss or damage.

14. Compulsory Deductibles Cover

A compulsory deductible is a set amount that you must spend as your part of the damage in the event of loss or damage. This will also assist to lower your premium rate. If the car is entirely destroyed, this will also include the destruction or harm to lights, tyres, mudguards, tubes, bumpers, bonnets, headlights, or paintwork.


Being responsible for a commercial vehicle is a big responsibility. Commercial vehicles can be of any given size, from medium-sized sedans to large trucks or buses. They are also used for all different functions and purposes, from transporting goods to carrying passengers from one place to another. Understanding the necessity of commercial vehicle insurance will help you take the necessary steps to protect your business and drive safely every time you head out onto the road.

Frequently Asked Questions

Yes. As per the Motor Vehicles Act of India, all vehicles running on Indian roads including commercial vehicles have at least a third-party liability insurance policy.

There is no set 'best' commercial vehicle insurance plan. Compare and contrast all your available options and make your ideal choice based on your requirements and budget.

Commercial vehicle insurance plans are slightly more costly than personal car insurance policies because commercial cars are expected to run more kilometers than personal vehicles.

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