11 September 2020

What insurance do I need for my business vehicles?

Delivery scooter to full fleet, van to ute with all the gear: the way that vehicles are used for business are as varied as the people who drive them. Whether you’re a tradie with a built-in tool chest or a business running a sales fleet of branded sedans, you need insurance for your business vehicles.

The scope of commercial vehicle insurance covers accidents where you are at fault or where another driver is at fault through to fire damage or theft, and there’s a range of options for how much cover you can obtain.

Choosing insurance for commercial vehicles can be quite complex: there are many factors involved, including usage, type of vehicles, industry sector and where you are driving them.

There are two basic cover options

    1. personal comprehensive car insurance with added cover for business use (suits micro and small enterprises).

Bear in mind many insurers don’t offer commercial vehicle cover under a business use For personal vehicles policy, and some industries, such as fuel and dangerous goods transport, require specialised insurance.

Business use insurance should specify cover for your vehicle being driven by others involved in the business (if relevant), as well as your tools of trade being stolen or damaged while in the vehicle.

    1. standalone commercial vehicle insurance (one or more commercial vehicles).

Typically this covers one to multiple vehicles used principally for commercial purposes, including trucks, 4WDs and earth movers, and is suitable for growing to medium sized businesses.

Types of cover include policies for

  • commercial vehicles – suits self-employed and small to medium businesses, such as electricians, real estate agents, landscape suppliers, traders and local delivery carriers and couriers
  • fleet vehicles – usually up to 10 vehicles, ideal for larger retail, manufacturing, health and community services
  • heavy vehicles – for larger fleets, such as transport and logistics, construction and earthmoving businesses.

If you have recently changed your business model to making deliveries

If your business is one of the many that have pivoted to making deliveries to meet changed market conditions you should check the insurance for the vehicles you’re using has cover for business use for these courier/delivery activities.

Courier businesses have the choice between a comprehensive commercial policy which covers damage to carried goods for nominated customers or blanket coverage to protect your legal liability to customers with approved consignment notes. This policy can extend to cover consequential loss to customers.

How much cover do you need?

Motor vehicle insurance for commercial vehicles is similar to the options available for privately owned vehicles.

Available cover includes

comprehensive cover

  • for certain types of loss or damage to your own vehicle
  • liability for certain types of loss or damage you or certain other people cause to another person’s vehicle or property

third party property damage only

  • liability for certain types of loss or damage you or nominated drivers cause to another person’s vehicle or property

fire, theft and third party property damage only

  • for certain types of loss or damage to your own vehicle by fire or theft
  • liability for certain types of loss or damage you or nominated drivers cause to another person’s vehicle or property

fire and theft only

  • for certain types of loss or damage to your own vehicle by fire or theft.

Only you can decide what kind of cover is most suitable for the way your business vehicles are used but more comprehensive policies provide the most protection.

Assigned values

When it comes to how much to insure your vehicle(s) for, you also have two options. You can choose between market value and agreed value. If you opt for agreed value you may need to get an independent valuation, particularly for specialised or heavy vehicles.

For any commercial vehicle cover an excess may apply and this should be factored into your budget planning. Exclusions may also apply, and these are mainly concerned with the condition of the vehicle, being unroadworthy or unsafe due to wear – or being driven by an unlicensed driver.

Factors that affect premiums

As with privately owned vehicle insurance a number of variables influence the cost of your premium. These include

  • what your business does
  • where you operate
  • the age, make and model of your vehicles
  • location and operating radius
  • your previous claims history
  • whether you choose to pay a higher excess to reduce your premium.

If your business involves transport in any way then accidents, damage or theft have the potential to severely impede your operations, and to cost you time and money.

Getting the right policies and extensions is critical and this can be a complex area to navigate. Take the time to investigate your options before deciding what will work best for your business. Need advice? We are here to help.

Connect with an expert

Further reading

Couriers and delivery services

Transport and logistics insurance

Tradies tools and stock insurance


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