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It makes no difference whether a business has a fleet of cars or a single vehicle; chances are if they are not on the road, revenue is being lost. What that means is that a business vehicle will generally be on the road a lot. This is why insuring even the smallest of business fleets is important to help prevent devastating losses in the case of accidents, theft, or other mishaps common for frequently used vehicles.
Business vehicle insurance checklist
Business vehicles are typically on the road a lot more than privately owned vehicles, so the risk of them being stolen or damaged is higher.
According to Business Victoria, when insuring business vehicles you should check that:
- Employees who use their own vehicles as part of the operation of your business have had their insurance extended to cover commercial use
- Any personal vehicle insurance you hold covers business use
- Your coverage correctly covers you against your particular form of commercial motor vehicle usage
- You are eligible for fleet cover, and determine whether it would benefit you
- All your drivers hold valid licences
- You have advised your insurers of any serious motor convictions recorded against you or your employees in the past five years
While business and fleet insurance can differ in many small ways from policy to policy, the most important difference is that most fleet policies will only cover ten vehicles or more. Business vehicle cover allows a business to flexibly cover each vehicle of the fleet for one amount, or vary excesses.
Most business insurance packages will cover up to $20 million for comprehensive and $30 million for legal liability (some are only $20 million, so it's best to shop around). Extra cover can be taken out for dangerous goods, and if approved, this amount can be up to $5 million. Other extras can include car hire while a vehicle is being repaired and accommodation costs. You can also find some interesting information about car insurance at CHOICE. Popular providers of business insurance include NRMA, GIO, AAMI amongst others.
Business insurance for individuals or fleets
There is no major difference between an individual and a company taking out this type of insurance policy, except that there may be varying factors in the policy price. For instance, a company with a fleet of cars to insure may get a reduced premium if they have a risk management program or receive a discount for multiple policies.
While the car will be insured under the business name, some insurers offer a discount if a driver is nominated. This may prove to be a bonus for small businesses where there is only one driver with a company car.
If a company has a fleet of trucks carrying dangerous goods, comprehensive insurance and protection against legal liability are important. Some policies will cover clean-up costs for debris falling off vehicles (and in some cases clean-up costs for emergency vehicles), and liability arising from accidents involving hazardous goods.
It is imperative for businesses that have a vehicle fleet, company car or are involved in transportation to comply with the Australian Code for the Transport of Dangerous Goods by Road and Rail. Failure to do so could result in claims being denied in the event of an accident. In most cases, any losses resulting from a vehicle being off the road will not be covered.
