Why is commercial motor insurance important?

Commercial Motor Insurance is important if the holder of the policy is in an accident with a third party and needs to make a claim, or a claim is brought against you for negligence whilst driving. Too many business owners believe that a Personal Car Insurance is just the same as a Commercial Car Insurance policy, so it doesn't matter which you choose for your business vehicle. This is far from the truth and can result in significant financial hardship to small business owners, as well as all the stress and worry, when a claim is denied.

When is a commercial motor insurance policy required?
The majority of insurers consider that a commercial vehicle requires a Commercial Vehicle Insurance policy and not a Personal Car Insurance policy. Commercial policies reflect the fact that these vehicles are often driven in heavy traffic for long hours, transporting goods or visiting clients, so these commercial policies reflect these increased risks. If your business uses vehicles for any purpose, whether that's to pickup or deliver goods, visit customers or collect the mail from your PO box - ensure you discuss with your insurer if you need a Commercial Motor Insurance policy. There are two different types of policies that will cover commercial vehicles, either a Personal Vehicle Insurance with added cover for business use or a Commercial Vehicle Insurance. Which one do you need?

Personal vehicle insurance with added business use cover
If you own a private vehicle with a personal comprehensive car insurance that's used occasionally for business purposes, then this policy might be suitable for you. Whenever you insure a vehicle, the insurer usually asks if the vehicle is for private or business use, and if you indicate that you will be using it for both purposes, the insurer may offer you additional commercial cover or suggest you take out a commercial vehicle policy. This type of policy may also cover theft or damage to business items in your car (for example equipment or products) and it may also cover other people who may drive your vehicle for commercial purposes. Since this type of policy will have restrictions and not all insurers offer this added cover, it's recommended that you talk to a motor insurance specialist who can help you decide if this cover is suitable for your needs.

Commercial vehicle cover
When a vehicle is used mainly for commercial purposes, then a Commercial Motor Insurance policy is required. You can cover one vehicle or a fleet of vehicles, where the fleet can include trucks, earth-moving vehicles, 4WDs, sedans, and so on. Commercial Motor Insurance is a comprehensive policy that covers damage to your business vehicle or anyone else's vehicle or property, but not third party injuries, which is why you also need to take out a Compulsory Third Party (CTP) Policy. To decide what type of Motor Vehicle Insurance policy is suitable for your business, contact your local insurance adviser today.