What is Commercial Auto Insurance and why do you need it?

There is no doubt that having car insurance is important for a private vehicle. In fact, it is illegal here in the Philippines to drive around with a car that has no compulsory third-party Liability (CTPL) insurance. CTPL is one of the requirements you need to get a loan approved or to register your vehicle. 

Aside from being a requirement for those two things, car insurance also protects you from going broke when an accident, disaster, or fender bender happens. Auto insurance is not limited to just private vehicles. If you’re a business owner who relies on a fleet of vehicles for your day-to-day operations, commercial auto insurance is available to protect you, your employees, your vehicle, your products, and other people while on the road.

Commercial vehicles are vehicles used to transport goods or paying passengers. Vans, pickup trucks, SUVs, or any other large motor vehicle could classify as a commercial vehicle. 

This type of insurance is important for business owners who use any vehicle for business purposes. It’s even more valuable to have if your employees use company vehicles for official business. Commercial auto insurance provides coverage for a vehicle or vehicles (if your business has a fleet) that you use for business operations. Here in the Philippines, commercial auto insurance covers the following:

• Vehicle damage
• Vehicle theft
• Death or injury of passengers in the insured vehicle
• Death or injury of third-party individuals
• Medical expenses
• Third-party property damage

Some insurance providers may even provide road assistance, towing, minor-roadside repairs, and anti-carnapping services. Others insurance providers conduct free road safety seminars or defensive driving classes for company drivers.

Driving in the Philippines is scary, and it's even scarier without insurance. The bad road conditions here in the Philippines, on top of drastic weather changes, can turn a calm, steady drive, into a freak accident in mere minutes. So, being prepared for that eventuality and insuring your vehicles can help you avoid incurring extra costs that you may not be able to handle in the case of such accidents. 

Here are some additional reasons to convince you why commercial auto insurance is a good thing to invest in:

Commercial auto insurance covers your employees, goods, and equipment along with your vehicle

Driving commercial vehicles means there is much more to lose compared to a private vehicle. Commercial vehicles may carry goods, expensive equipment, as well as your employees. Having commercial auto insurance means that in the case of unwanted accidents, your car’s precious cargo is protected.

Businesses require higher insurance limits

Owning a business opens you up to more opportunities and more risks. Driving a commercial vehicle is inherently riskier than driving a personal vehicle because it spends more time on the road than private vehicles do. 

This means that business owners need a policy that offers higher coverage. Commercial auto insurance plans have higher limits, which means that your policy may cover larger costs of liabilities. In addition, the higher limits may translate into savings since you have a higher ceiling before you have to take some of your money out to cover the liability costs.

Personal car insurance will not cover vehicles used for business purposes

When you use your personal vehicle to deliver goods for your business, in the unfortunate event that you are involved in an accident, the insurer might deny your insurance claim because your policy doesn’t have coverage for business use. In the case that the insurer approves the claim, the policy limit might not be able to fully cover the expenses you’ll have to answer for.