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Insurance For Commercial Vehicles
Wednesday, 15 July 2009 15:15
Most people would commit the mistake of thinking that personal car insurance would even cover their vehicles damage, while carrying out a commercial activity. However, this is far from true and one needs to understand that while both personal car insurance and commercial car insurance have very similar features, they differ on certain technicalities. This article aims to shed some light on this issue.

Any activity that results in commerce is termed as a commercial activity. Vehicles used to generate revenue by making deliveries etc. are categorized as commercial vehicles. All vehicles used by you for any purpose - personal or commercial, need to be insured.

Insurance policies for different uses of a car are also different. This means, a commercial vehicle will be covered under a different policy as opposed to your personal car and in case, you are using your personal vehicle for a business purpose you should be clear that your personal car insurance would not cover any damages arising due to the commercial use of your car.

A vehicle when used for commercial activity needs to be protected by what is known as – Commercial Auto Insurance Policy. If an employee running his job related task in his personal vehicle meets with an accident, he won’t be covered by his personal car insurance. Insurance companies make a clear distinction between what constitutes commercial and what is included under personal activities.

Home-based entrepreneurs using their personal vehicle for any commercial activity would need to be covered by a separate insurance policy meant for commercial vehicles. However, factors like how frequently do you use your vehicle for commercial work should also be looked into, as this would depend upon your regional law too. Here, it is best to consult an insurance adviser to make the most informed choice.

The language and terminology of insurance policies often trick people. Some personal car insurance policies would read that it would not cover the vehicle if it were being used for 'primarily' commercial
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