Whether its delivering orders, meeting customers, picking up supplies or transporting material and equipment, taking your business on the road can be essential to your everyday operations. However, this brings with it many dangers which may financially drain you if you don't take accurate measures. To keep your business protected against possible hazards, you need the right insurance policy for your commercial fleet.

What is a Commercial Motor Insurance Policy?

Commercial Vehicle insurance is designed to cover losses should you or your employee be involved in an accident while driving for work purposes.

Third-Party Insurance and Comprehensive Insurance

Third-Party Insurance covers the damages suffered by a third-party in the case of an accident involving your vehicle. "Third-party" may refer to pedestrians, bystanders, drivers or passengers who were affected by accident. Third-party insurance is mandatory as per the Motor Vehicles Act, 1988 in India.

The comprehensive insurance policy covers not only third-party claims but, also personal damage. This type of policy offers a more extensive cover, including theft and damage caused by natural calamities.

How is the EMI of this type of insurance calculated?

The EMI you pay for this type of insurance will depend on the following key factors:
  • Deductible:

    This is the percentage of the claim that the policyholder has to pay from their pocket. If the deductible percentage is high, then the EMI will be less.
  • Third-party or Comprehensive:

    Comprehensive insurance has more excellent coverage, and hence it drives up the EMI. However, it also offers more comprehensive coverage.
  • The Number of Vehicles and Age of Vehicles:

    The number of vehicles used by your business is taken into consideration. The age of your vehicles is also an essential factor while calculating EMI. Due to depreciation, the value of a vehicle keeps diminishing over time; hence old vehicles will increase the EMI.

Terms of Contract:

Based on your contract here are a few details that you must pay attention to:
  • Area of Operations:

    In the case of Commercial Vehicle Insurance, the coverage is valid only in a predefined geographical area. If your vehicle meets an accident outside this zone, your claim may be rejected.
  • Safety Equipment:

    Having safety equipment such as fire extinguishers and seat belts are a must to claim reimbursement from your policy in the case of an accident. Installing special safety equipment may also drive down the EMI.
  • Operational Hazards:

    Some special-purpose vehicles such as forklifts and bulldozers which may pose a risk to their operators.  Such kind of vehicles will have dedicated clauses for them in the contract.

What does Commercial Vehicle Insurance Cover?

  • Injury or Death:

    This kind of insurance policy covers the injury or death of your employees who were either driving or were passengers in your commercial vehicle. Third-party insurance covers the death, injuries or damages sustained by a third party involved in an accident with your commercial vehicle.
  • Damage due to Accident:

    If the vehicles used for the business are damaged, the policyholder can raise a claim. 
  • Damage due to Calamity:

    The insurance covers damage to the vehicles due to natural disasters.
  • Theft:

    This type of policy protects your commercial vehicles from robbery and burglary.

Protect Your Business with a Commercial Vehicle Insurance Policy

A commercial vehicle insurance policy is the all-inclusive solution to keeping your business, your employees and your vehicles safe from risks while on the go. Make sure you get your commercial vehicles insured to sail through unexpected accidents with ease.

Click here to apply for a two wheeler insurance.


The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.

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