Commercial Motor Insurance

commercial motor insurance

The range of commercial vehicles insured (and the associated risks) vary widely and include:

  • Cars used in connection with a business
  • Goods-carrying vehicles: all the different types of vehicles designed to carry goods. Classified by insurers for risk assessment purposes either by their carrying capacity or their plated weight. The goods carried are not covered by the motor policy, cover instead being provided under a separate goods in transit policy
  • Passenger-carrying vehicles: includes minibuses, coaches and buses. The main exposure for insurers comes from the risk of bodily injury to passengers.
  • Hire vehicles. These fall into these categories:
    • Private hire: the hiring of a car with driver from the operator’s premises
    • Public hire: taxis which can be hired on the streets or at recognised taxi stands
    • Self-drive hire: the hire of a vehicle, such as a car or van, without a driver
    • Agricultural and forestry vehicles: such as tractors, combine harvesters, threshing and baling machines. These vehicles will not usually be used a great deal on the roads and therefore present a lower risk to insurers
    • Vehicles of special construction (special types): includes various types of vehicle also used as a tool of trade; such as ambulances, mobile shops, cranes and fork-lift trucks. The third party working risk is not covered by the motor policy, cover instead being provided by the insured’s public liability or engineering policies.

There are two distinct types of policy that are common in the commercial vehicle insurance market:

  • Fleet. This is where a number of vehicles owned by the same company (usually a minimum of 10) are insured on a single policy. Fleet policies can consist of private cars, goods-carrying vehicles or other types or a mixture of different types. A number of insurers who offer ‘mini-fleet policies, which are for a minimum of five vehicles.
  • Non-fleet This is the term used to describe policies which insure individual or fewer than ten vehicles (or five if suitable for a mini-fleet cover).

Insurers also offer specialist motor trade policies. These are designed primarily for garages and similar businesses which sell and/or service and repair vehicles. In addition to cover for their own vehicles, they also have a variety of other needs (such as for damage to customers’ vehicles, test drives and breakdown recovery).

This covers all the carrying own goods (comprehensive), third party fire and theft, general cartage, and the third party only.

In the insurance world the term motor cycle includes any kind of cycle propelled mechanically and includes mopeds, there are a wide range of risks as in motor vehicles.

Standard cover

The standard of comprehensive motor cycle policy is much the same as that of the private motor policy, therefore we need only to identify the main difference between the motor cycle policy and private policy.  And this can be explained in the following exceptions as below:

  • No cover provided for the theft of accessories or spare parts unless the motor cycle itself is stolen at the same time.
  • There is no personal accidents benefits, medical expenses or personal effects cover.
  • The liability section general indemnifies the insured or his personal representatives in the event of the insured death, if others are permitted to drive the motor cycle then would also be indemnified as would users of motor cycle for social and pleasure purpose.

This covers all the comprehensive package and third party premium package for all the public taxis, private hire, tour operators, and buses- daladala within city, buses- up country, buses- private, and buses for schools.

The only difference for the comprehensive coverage for this with the private vehicles is that the motor parts attached or detached the claim will be adhered too in the private vehicles, but for the commercial vehicles you’re paid only when the parts were stolen while attached to the vehicle.

Since a trailer can be pulled by different trucks, they carry independent insurance. Cover can be Comprehensive or Third Party insurance depending on the age of the trailer, over or under 10 years old.

This also includes the comprehensive, third party fire and theft, and the third party only cover; it covers all the steel tankers below 10 years, aluminium tankers below 10 years, and tankers over 10 years old.

But also the insurance cover the towing of trailers under third party liability section of the policy as in the trailers as explained above.

This covers all the comprehensive and third party premium for all the special vehicles such as the farm tractors, forklifts, graders, cranes, excavators, and the ambulances.

This covers all the carrying own goods (comprehensive), third party fire and theft, general cartage, and the third party only.

It covers any loss of damage to the vehicle and its spare parts and accessories while they are on the vehicle, in contrast to private vehicle there is no cover for spare parts and accessories while they are detached from the vehicle.

The range of cover available for commercial vehicles is the same as private motor and motor cycle except of the below discussed differences;

  • Driving other vehicles, even in respect of good the range of vehicles is so extensive that insurers do not want to encourage the insured or their employees to drive other vehicles under their policy.
  • Personal benefits, personal accident benefits medical expenses, personal belongings and clothing are not covered under commercial policy.
  • Loading and unloading, cover in respect to third party liability also applies to accident occurring during loading and unloading the vehicle. In case of the driver or attendant this extend beyond the boundaries of the carriage way.
  • Indemnity to driver, generally anyone may drive the vehicle on the order or with the permission of the insured.
  • Indemnity to user, the insured may allow someone to use the vehicle for social domestic and pleasure purpose , though they may not be necessarily actually driving.
  • Indemnity to passengers, this cover liability to passengers for their negligent acts.
  • Legal costs, insurance provide cover for certain legal costs.

The risks associated with motor vehicles include:

  • Loss of part or the whole vehicle due to fire, theft or damage.
  • Damage to third party property.
  • Injury to the third party.
  • Death/disability to third party.
  • Medical expenses.
  • Loss of income following an accident (loss of use).
  • Legal costs to defend a claim

Requirement For Obtaining Insurance:

(For Third Party, Third Party Fire and Theft and Comprehensive)

  • Vehicle registration card – that will provide most of the general info needed like:
    • Name of insured
    • Address of insured
    • Type and details of vehicle the vehicle
  • Value of the vehicle – for Comprehensive and TPFT covers

Coming Soon

No liability for loss/damage caused,

  • Outside the geographical area.
  • Vehicle is used by unauthorized driver.
  • Losses due to war and allied perils.
  • Radioactive contamination and explosive nuclear assembly
  • Riot and civil commotion
  • Sonic bangs (that is pressure waves from sonic/supersonic aircraft or other aerial device)
  • Pollution and contamination unless arising from a single identifiable event.