Sunday, July 14, 2013

Commercial Vehicles Insurance Policy

Commercial insurance are generally any drivable vehicle over a two tonne carrying capacity and can include trucks, prime movers, earth moving equipment like bulldozers, excavators and bobcats. Operators need to make sure that they have the correct level of cover in place.

Firstly, any vehicle that goes on a road or public access point like a driveway must be registered with Old Transport. Vehicle registration provides Compulsory Third Party (CTP), which covers for third party personal injury in the event the vehicle is involved in an accident. What this means is that if the vehicle is travelling along, similar to a car being driven along the road, and it is involved in an accident where third party people are injured, the CTP is the component that covers personal injury.

Secondly, the commercial motor vehicle should also have commercial motor vehicle insurance that covers the actual vehicle. Comprehensive insurance covers the vehicle for accidental damage as well as any third party property damage that is caused as a result of an accident. It is important that the vehicle is insured for the correct amount under the value method adopted by the insurer otherwise the vehicle owner may find he/she has to contribute to the loss. Comprehensive insurance generally extends to cover loss from other events like fire, storm and tempest, burglary, impact and malicious damage.  Alternatively, an insurance policy for third party property damage is the absolute minimum level of cover available and will cover third party property damage in the event the vehicle is damaged in an accident. There would be no cover for the vehicle at all unless the damage was caused by another party and they were held to be liable for the loss; a claim for the damages would need to be put through the other party's insurance.

Thirdly, the owner/business operator needs to make sure that they have appropriate levels of public liability that covers their commercial activity. When the vehicle is being used to perform the commercial activity for which it is meant to do to generate income, neither the CTP through the registration nor the commercial motor vehicle insurance will pick up a claim if a third party is injured as a result of the vehicle being used to perform its commercial activity. Let's take a bobcat purchased for an earth moving business, which moves the earth to level out a house pad. Should a third party fall into a hole that was left open on the newly prepared site and breaks their leg, it is likely that  the bobcat owner would be held liable for the accident, and  their public liability policy would be the only insurance policy that they could look to try and claim on to meet the associated costs. If there was no public liability policy in place, the owner has no other recourse except to pay for these expenses personally and out of their own pocket. A public liability policy may also pick up any additional personal injury costs that are not covered under the CTP component of a vehicle registration, however it must be noted public liability is not a substitute for CTP. Insurance will always follow the law, and if there is a legal requirement to have the vehicle registered, even if it is a conditional or limited registration, and the owner/operator doesn't do this, the public liability will not be a backstop for any associated claims in the event of third party injury or damage.

For trucks used in carrier and cartage businesses, there are additional insurances like marine transit insurance and load insurance that also need to be taken out.

Each insurer offers different terms and conditions for commercial motor vehicle policies and public liability and policies cover.

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