Most people know what personal car insurance is and how it works, but commercial car insurance is a little more complicated. This article breaks down what commercial vehicle insurance is and how it differs from personal car insurance.
What is Commercial Vehicle Insurance?
Commercial vehicle insurance is specifically designed to provide cover for any cars, trucks, or vans that are used for business purposes. It generally provides broader coverage that may not be typically included in a personal car insurance policy.
Why Commercial Vehicle Insurance Matters
A vehicle used for business comes with higher risks compared to personal driving. Businesses often face long-distance travel, heavy goods, frequent use, and multiple drivers, all of which increase the risk of accidents or damage.
Commercial vehicle insurance provides financial protection against unexpected incidents that could disrupt business operations or cause heavy expenses.
Types of Commercial Vehicle Insurance
Depending on the plan you select, commercial vehicle insurance is typically available in three types of cover:
- Third-Party Coverage
Since no vehicle can operate on the road without insurance, third-party coverage is the most basic insurance policy you can obtain for the vehicles used in business.
This policy covers injuries or death brought on by your company car as well as damage to other people’s property.
- Third-Party, Fire and Theft
This is a specific type of policy designed for business vehicles that protects against liabilities to other parties (third parties), as well as damage to your own vehicle caused by fire or theft.
- Comprehensive Insurance
This insurance policy includes all the benefits of Third Party and Third Party, Fire & Theft coverage, while also protecting your own vehicle against accidental damage. It is the preferred option for businesses that want full protection.
Difference Between Personal and Commercial Vehicle Insurance
| Feature | Personal Car Insurance | Commercial Car Insurance |
| Primary Use | Social, domestic, recreational, and commuting | Transporting goods/clients, making deliveries, driving to job sites, or other work activities |
| Policyholder | An individual | The business entity that owns or leases the car |
| Covered Drivers | Typically the policyholder and household family members | Often covers multiple employees or drivers under a single plan |
| Coverage Limits | Generally lower liability limits, suitable for typical personal risk | Higher liability limits to account for increased risk and potential for larger claims |
| Vehicle Types | Standard cars, SUVs, and personal use trucks | May cover a broader range of vehicle types, including delivery vans, large trucks, and specialty vehicles |
| Cost | Generally less expensive | Typically more expensive due to increased time on the road and higher risk exposure |
Who Needs Commercial Vehicle Insurance?
Commercial insurance is required for anyone using a vehicle for business purposes, including:
- Delivery riders and drivers
- Logistics and transport companies
- Small business owners transporting goods
- E-hailing drivers (Grab, inDrive, AirAsia Ride)
- Vans or pick-up trucks used for transporting equipment
- Company cars assigned to employees
Even if you own a private car, once it is used for business, you may need to switch to a commercial insurance policy to avoid claim disputes.
Conclusion
Commercial vehicle insurance is necessary for business that running their business by rely on vehicle. It prevents your company from suffering financial losses due to unexpected incidents, liabilities, damage, and accidents.
Select the right insurance plan ensures smoother operations, better risk management, and peace of mind for both business owners and employees.
If you wish to compare different commercial vehicle insurance quotes or want to explore better coverage options, platforms like Key Plus can assist you instantly.