Launching a new transport business can be a profitable venture, especially with the growing demand for logistics, e-commerce deliveries, and commercial mobility. However, before your fleet hits the road, it is essential to understand the insurance requirements that apply to your business.
The most important among these is commercial vehicle insurance, which protects your assets, ensures compliance with legal norms, and safeguards your business from unexpected financial losses.
This article explains the types of insurance required, the legal obligations, and how to select the right cover for your commercial vehicles.
Commercial vehicle insurance is a policy specifically designed for vehicles used in commercial activities. These include goods carriers, passenger vehicles such as taxis and buses, pick-up vans, delivery vehicles, and construction equipment.
This insurance offers protection against:
Whether you operate a single vehicle or manage a fleet, having commercial vehicle insurance is essential to keep your operations secure and uninterrupted.
Yes, insurance is mandatory for all commercial vehicles operating on Indian roads.
According to the Motor Vehicles Act, 1988, every commercial vehicle is required to have third-party insurance to operate legally. This insurance covers injuries, death, or property damage caused to third parties due to an accident involving your vehicle.
While third-party cover is mandatory, it does not protect your own vehicle. Therefore, most transport business owners opt for comprehensive commercial vehicle insurance, which offers broader coverage and financial protection for their own vehicles as well.
Starting a transport business involves a significant investment in vehicles, manpower, and logistics. Insurance plays a key role in ensuring your business is resilient and financially secure.
Without valid insurance, your commercial vehicles cannot be registered or operated legally. If caught without it, you may face fines, seizure of permits, or even imprisonment.
Accidents, theft, or natural disasters can lead to heavy losses. With commercial vehicle insurance, your financial liability is reduced, and claims help you recover faster.
Insurance ensures your business keeps running even after an unfortunate event. It reduces downtime and protects your revenue.
Choosing the right policy is crucial for effective coverage. Here are the two main types:
This is the minimum legal requirement. It covers:
It does not cover any damage to your own vehicle. The premium is usually lower but offers limited protection.
This includes third-party coverage along with own damage protection. It covers:
Comprehensive insurance is highly recommended for new businesses as it offers wide-ranging protection.
To enhance your insurance coverage, consider purchasing optional add-ons. These include:
Provides financial compensation in case the driver or owner suffers injury or death due to an accident.
Essential for logistics and cargo transport businesses, this add-on covers damage or loss to goods being transported.
Provides on-site support in case of a breakdown, flat tyre, or fuel issues, especially helpful during long-distance trips.
Covers damage to the engine or tyres due to waterlogging, potholes, or wear and tear, offering additional peace of mind.
When purchasing a policy, keep the following documents ready:
As a new transportation business owner, take the time to compare policies and understand which one suits your operations best.
For any new transport business, understanding and fulfilling insurance requirements is a critical step. Commercial vehicle insurance ensures you meet legal obligations, protect your business assets, and reduce financial risks.
While third-party insurance is compulsory, opting for a comprehensive policy with suitable add-ons can provide complete peace of mind.
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