What is Commercial Insurance? | Types & Benifits

By Okbima 16 Jan 2023
What is Commercial Insurance?


A Commercial Insurance policy is a customized motor insurance policy that protects a commercial vehicle and its owner-driver from damages and losses. This could include losses and damages caused by accidents, collisions, natural disasters, and fires, among other things. Commercial vehicle insurance is required for all enterprises’ vehicles, including auto-rickshaws, cabs, school buses, tractors, commercial vans, and trucks, among others.


Why do I require a Commercial Insurance?

A Commercial Insurance is important for the following below reasons: –

  1. If your company owns one or more vehicles, it’s critical to obtain commercial vehicle insurance to protect and indemnify your company from losses and damages caused by your vehicle(s) and the people who use them.
  2. A commercial vehicle insurance policy will ensure that your stakeholders and passengers are always protected and covered if your principal business involves the use of cars, such as a regular cab service or a private school bus.
  3. It is a legal requirement to have at least a Liability Only policy in place, which covers third parties from any damages and losses caused by your business vehicle.


What are the various types of Commercial Insurance?

The various types of Commercial Insurance are as follows: –

  1. Third Party cover:   In the event of an accident, the policy guarantees to compensate exclusively for the damages caused to a third party.
  2. Comprehensive Cover:  The policy provides extensive coverage against damages. It covers loss and injury to you and your vehicle, as well as third-party life and property, if any is involved


What are included in Commercial Insurance Policy?

The commercial Insurance Policy includes the following: –

  1. Accidents: –  Accidental Damages to the Business Vehicle Damages to the commercial vehicle as a result of an accident.
  2. Theft: –  Loss or damage to a commercial vehicle as a result of theft.
  3. Fire: –  Damage to the commercial vehicle as a result of a fire.
  4. Natural calamities: –  Damages to the commercial vehicle because of a natural disaster.
  5. Personal Injury: –  If a commercial vehicle is involved in an accident, the driver is injured or killed.
  6. Losses incurred by third parties: –  Any third-party harm caused by the commercial vehicle.
  7. Towing Vehicles with Disabilities: –  Any harm to the towed vehicle caused by the commercial vehicle.


What are excluded from the Commercial Insurance Policy?

The following are excluded from the policy: –

Electrical Failures, Depreciation, and Aging

Breakdowns that aren’t through accidents

Damage caused by illegal activities such as drinking and driving, overloading, and so on.

War-related damage, nuclear hazards, and ionising radiations

Consequential loss; only the original damage will be compensated if it causes loss or subsequent harm.

Someone other than the professional driver is operating the vehicle.

Leave a Reply