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Check Out All the Advantages and Disadvantages of Commercial Car Insurance

By Juhi Walia
19 August 2022, 1:03 PM

Commercial car insurance, as the name suggests, is a car insurance policy that will cover any small or large vehicles owned by the business and driven by a company official or business owner. No matter the scale of your business, if vehicles are involved, you need a commercial car insurance policy for them.

This car insurance aims to protect all your commercial vehicles and their drivers in case of any unfortunate circumstances or mishaps. Make sure to choose a policy that can provide optimum benefits and protect you against any liabilities that may arise. In this guide, let us discuss all the advantages and disadvantages of commercial car insurance.  

Why Do You Need Commercial Car Insurance?

Anyone working a business with the primary need for a commercial vehicle needs commercial car insurance. It protects and covers personal damages, third-party damages, and any other damages that occur.

Third-party car insurance is a mandate, but comprehensive car insurance is a precautionary measure. Commercial car insurance will protect all the trucks and commercially running automobiles when damages occur while on the road, in transit, at home, or while transporting goods or services. Contact your insurance provider to have a tailor-made insurance policy for your commercial automobiles. It will also be beneficial to track your full insurance amount in one bill if claimed.

There are several terms and conditions to this type of car insurance. Let us discuss in detail what all vehicles and liabilities are covered and not covered under commercial car insurance.  

What Vehicles are Liable for Commercial Car Insurance?

Here is a list of all the automobiles that fall under the category of getting commercial car insurance.

  • Company cars
  • Staff cars, buses
  • Delivery vehicles, trucks, or vans
  • Cabs
  • Pick-up cars
  • Construction vehicles like JCB, forklifts, etc.
  • Utility vans
  • Box trucks

This car insurance will provide for both, collision damage and liability in case of claims.

What is Covered in Commercial Car Insurance?

The car insurance companies will compensate several losses and damages for the commercial vehicle. Here is an account of some of them:

1. Loss Against the Insured Vehicle

The company will provide compensation for the vehicle under the following situations:

  • Fire explosion, lightning, ignition
  • Burglary, housebreaking, theft
  • Riot or strike
  • Fire and earthquake shock damage
  • Flood, cyclone, typhoon, storm, hailstorm, frost
  • Accident
  • Malicious act
  • Terrorist act
  • In transit on road, railways, waterways, elevators, air
  • Landslide, rockslide

2. Loss to Third-party

The company will provide for the damages or losses to the third-party when your commercial vehicle causes the following:

  • Death or body injury to the third-party
  • Damage to the property of the third-party

3. Personal Loss in an Accident

The insurance company will cover the following categories of personal loss, subject to the usage of the insured vehicle in any of the below-mentioned situations:

  • In case of death of owner/driver
  • In case of bodily damage
  • In case of organ loss during an accident
  • Permanent/Temporary disablement from the injuries

The liability coverage with commercial insurance is higher than personal insurance. This will come in handy in case of any risky or unfortunate scenarios of an accident where you are worried about your business or drivers.

What is Not Covered in Commercial Car Insurance?

Some general exceptions are not covered under commercial car insurance. Here is a list of cases where the insurance provider is not liable for providing compensation:

  • Any loss or damage from an accident that has occurred outside the geographical area
  • Any liability arising out of contract
  • Driven by anyone but the insured driver
  • Any loss happening as a part of the consequence of a situation
  • Due to radioactive contamination
  • Any losses happening due to nuclear weapons material
  • Foreign hostilities or warlike operations

What Type of Coverages are Provided?

Commercial car insurance as a base car insurance provides the following coverages:

  • Collision benefits
  • Financial and legal liability
  • Medical payments for any injuries caused in an accident
  • Damages caused to the vehicle during an accident
  • Damages by theft, fire, natural calamity, vandalism, etc.
  • Rental costs for temporarily rented automobiles for your business purposes
  • Employee vehicles used for business purposes
  • Coverage against any van, cab, or car used for stakeholders’ pick-up and drop-off

Depending upon the criteria of your insurance provider, your compensation will be provided. If you have comprehensive car insurance, then it can also extend to the spare parts of the vehicle.

Advantages of Commercial Car Insurance

As one can know from the features of this insurance policy, the major benefits of having car insurance for commercial automobiles are:

  • Covers for third-party penalty car insurance claims against you
  • Provides for car and damage repairs in case of an accident
  • Assists with the legal liabilities in the form of legal fees
  • Brings extra benefits to the survivor in case of any death or injury in an accident
  • Provides medical bills and quick service during unfortunate conditions
  • Helps with theft, fire, calamities, etc
  • Provides multiple discounts for the theft of the car
  • Extends the car insurance to anyone driving in your place
  • Provides for tax deductible as these are considered as a business expenditure
  • A monetary gain in times of loss or damage
  • Provides a premium rate of discount
  • No-claim bonus is awarded during renewal if no claim has been made throughout the tenure.

Drawbacks of a Commercial Car Insurance Policy

On the flip side of the coin, there are certain drawbacks of this car insurance, such as:

  • No claims beyond the contract are covered
  • May charge additional for add-ons
  • Does not cover electrical or mechanical mishaps
  • Insured for a limited geographical location
  • Does not cover any claim under damages of radiation, nuclear threats, etc.

To Sum Up

Even with the policy's limited drawbacks, getting a basic plan for your commercial automobiles is mandatory. Make sure to get an insurance policy that covers the maximum of your claims.

Try to understand the liabilities that may arise for your vehicle in your business, and then make a choice of the car insurance policy and car insurance add-ons.  

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1. Can I get my commercial car insurance online?

Yes. You can get commercial car insurance online from Paytm Insurance. 

2. What is the commercial car insurance cost?

In India, the cost of commercial car insurance starts from approximately INR 15,700+ GST. This can vary depending on your policy. 

3. What happens If I fail to renew my commercial car insurance?

In case of failure of renewal, the insurance provider will not pay for any claims in any circumstances of accidents.

4. Can I renew my commercial car insurance online?

Yes. Most insurance providers offer the option of online renewal of the policy.

5. Can I get a No-claim bonus on my commercial car insurance?

If you have not made any claims for damage on your commercial automobile during the tenure of your policy, then you are eligible for a no-claim bonus at the time of renewal.

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