Commercial motor insurance for Australian businesses
From a ute used by a trades business to delivery vans and other business vehicles, an accident or theft can interrupt operations quickly. RMA Insurance Brokers helps businesses review and arrange commercial motor insurance around vehicle use, drivers, values and business requirements.
Commercial motor insurance at a glance
Commercial motor insurance is designed for vehicles used in connection with a business.
Depending on the policy selected, cover may protect the insured vehicle against accidental damage or theft and provide cover for certain damage caused to another person’s vehicle or property.
Commercial motor products can range from cover for a single business vehicle through to multiple commercial vehicles, with comprehensive and more limited third-party cover options available depending on the insurer.
Key areas
- Accidental damage
- Theft and fire
- Third-party property damage
- Business-use vehicles
- Towing and recovery
- Hire vehicle and downtime options
Who should consider commercial motor insurance?
Commercial motor insurance may be relevant where vehicles form part of the day-to-day operation of a business.
- Trades and contractors
- Retailers and service businesses
- Regional businesses
- Property and livestock businesses
- Delivery and mobile businesses
- Businesses whose employees drive company vehicles
Commercial motor cover can apply to a range of vehicle types including cars, utes, vans, 4WDs, trucks and, depending on the insurer and policy, trailers or other commercial vehicles. Vehicles used on a farming property are usually considered under Farm Motor & Agricultural Machinery Insurance.
For businesses with larger fleets or transport operations, different fleet or transport-specific insurance arrangements may be more appropriate.
Commercial motor cover is generally reviewed alongside broader Business Insurance.
What can commercial motor insurance cover?
Accidental loss or damage
Comprehensive commercial motor insurance may cover accidental loss or damage to an insured business vehicle.
The amount payable and method of settlement depend on the policy, insured value and circumstances of the loss.
Depending on the insurer and the vehicle, comprehensive cover may be arranged on an agreed value or market value basis. The settlement basis can affect the amount payable if the vehicle is stolen or written off.
Theft & fire
Depending on the cover selected, insurance may respond where an insured commercial vehicle is stolen or damaged by an insured fire event.
More limited fire-and-theft options may also be available from some insurers.
Third-party property damage
Cover may respond where the insured becomes legally liable for accidental damage caused by the vehicle to another person’s vehicle or property.
This is separate from compensation for bodily injury dealt with through compulsory third-party or other statutory motor arrangements.
Towing & recovery
Depending on the policy, cover may include certain costs associated with protecting, recovering or towing an insured vehicle following an insured accident or theft.
The circumstances and limits vary between insurers.
Hire vehicle & downtime options
When a business vehicle is unavailable following an insured loss, the interruption to the business can extend beyond the repair cost.
Some commercial motor policies offer hire-vehicle, downtime or similar optional benefits, subject to policy terms and limits.
Accessories, modifications & vehicle equipment
Accessories, modifications, signwriting and equipment fitted to a commercial vehicle can affect both its value and the insurance required.
Depending on the policy, some items may be automatically included while others need to be disclosed or specifically insured.
Is your vehicle used privately or commercially?
The distinction between private and commercial motor insurance is not always as simple as the type of vehicle being driven.
A passenger car may be a business vehicle, while a ute may sometimes have both private and business use.
Some personal motor policies allow limited or occasional business use, but the acceptable use varies between insurers and policies. Commercial motor insurance is specifically designed for vehicles used as part of business operations.
Relevant considerations may include:
- travelling to customers or job sites
- carrying tools or equipment
- delivering products or materials
- employees driving the vehicle
- regular commercial travel
- use connected with the provision of services
- the type and extent of private use
The important issue is that the insurer understands how the vehicle is genuinely being used.
A vehicle should not simply be assumed to be appropriately insured under a private motor policy because it is also used personally.
Our Insights article on commercial versus private motor insurance works through this distinction in more detail.
Goods carried in your vehicle may need separate cover
Insurance for the vehicle and insurance for property being carried in the vehicle are different considerations.
Commercial vehicle insurance and goods in transit insurance are separate covers. Commercial vehicle insurance protects business vehicles, while transit insurance may protect goods against loss or damage while they are being transported.
Tools, stock, customers’ goods, equipment and other property carried in a commercial vehicle should therefore not automatically be assumed to be covered by the motor policy.
RMA Insurance Brokers can help identify whether these exposures are addressed elsewhere in the business insurance program or whether separate Transit & Cargo Insurance should be considered.
When does commercial motor become a fleet or transport risk?
A business with several cars, utes or vans can still have a commercial motor exposure.
As the number and type of vehicles increase, or where the business begins operating trucks, transporting goods for others or undertaking specialist transport activities, the insurance requirements can become more complex.
This is where the distinction between vehicle insurance and the broader risks associated with fleet and transport operations becomes important.
For businesses operating larger fleets or undertaking specialist transport activities, see Motor Fleet & Carriers Liability Insurance. Our Insights article on insurance considerations for rural transport operators covers the broader exposures.
What information may be needed for a commercial motor insurance review?
When reviewing commercial motor insurance, RMA Insurance Brokers may need information about:
- the vehicles to be insured
- make, model, year and registration details
- vehicle values
- how each vehicle is used
- where vehicles are normally garaged
- regular drivers and driver information
- claims and driving history
- accessories, modifications and signwriting
- whether tools, equipment or goods are carried
- finance or lease arrangements
- areas and distances in which vehicles operate
Additional information may be required for heavier vehicles, specialised uses or higher-risk activities.
Accurately describing the vehicle use is particularly important because commercial motor underwriting can differ depending on the vehicle, activities and drivers.
When should commercial motor insurance be reviewed?
A review is particularly worthwhile when the business has:
- purchased or replaced a vehicle
- materially changed a vehicle’s use
- added regular drivers
- installed significant accessories or modifications
- increased the value of a vehicle
- expanded into new areas or business activities
- increased the number of business vehicles
- experienced a motor claim or significant incident
Annual renewal is also an opportunity to confirm that vehicle values, usage, drivers and other information supplied to the insurer remain accurate.
What may not be covered?
Commercial motor policies contain exclusions, conditions, excesses and limits.
Depending on the policy, cover may not apply where:
- the vehicle is driven by an unlicensed driver
- the driver is affected by alcohol or drugs
- the vehicle is used for motor sport, racing or a time trial
- damage existed before the policy or insured event
- relevant vehicle use, claims history or driver information was not disclosed
- the loss relates to a use that falls outside the policy
- another compulsory or statutory insurance arrangement applies to the liability concerned
This is not a complete list.
The relevant policy wording, schedule, endorsements and circumstances of the loss determine how the insurance responds.
Example: a work ute is damaged in an accident
Illustrative example
A regional trades business uses a ute each day to travel between its workshop, customers and job sites. While travelling to a customer, the driver is involved in an accident that damages both the business’s ute and another vehicle.
The ute cannot be driven and needs to be towed for assessment and repair. Without the vehicle, the business also needs to consider how the employee will continue travelling to jobs while repairs are completed.
A claim would be considered against the commercial motor policy, including the circumstances of the accident, damage to the insured vehicle, third-party property damage and any towing or hire-vehicle benefits included in the policy.
Property such as tools or goods carried in the ute would need to be considered separately according to the applicable insurance arrangements.
Example provided for general illustration only. Policy coverage and the amount of any claim depend on the insurer, policy wording, cover selected, vehicle use, limits and circumstances of the loss.
Commercial motor insurance for businesses across Australia
RMA Insurance Brokers works with businesses across rural, regional and metropolitan Australia.
Our clients include trades, contractors, retailers, professional businesses, agribusinesses, transport businesses and other SMEs that depend on vehicles in their day-to-day operations.
We also work closely with rma network Livestock & Property Agents, providing strong connections with businesses and communities throughout regional Australia.
Our services are not limited to rma network Members. Businesses across Australia can contact RMA Insurance Brokers for commercial motor insurance assistance.
Why RMA Insurance Brokers?
Commercial motor insurance involves more than identifying the make and model of a vehicle.
How the vehicle is used, who drives it, what is carried, its value, the distances travelled and the cover selected can all affect the insurance required.
RMA Insurance Brokers can help you:
- review how vehicles are used in the business
- determine whether commercial motor insurance should be considered
- compare comprehensive and more limited cover structures
- review vehicle values
- consider drivers and vehicle use
- identify accessories or modifications that should be disclosed
- consider hire-vehicle and downtime requirements
- identify where goods, tools or transport exposures need separate consideration
- approach suitable insurers
- assist with policy changes, renewals and motor claims
Our focus is on understanding how vehicles support the business and helping arrange insurance relevant to those operations.
Frequently asked questions
What does commercial motor insurance cover?
Depending on the policy selected, commercial motor insurance may provide cover for accidental loss or damage to an insured business vehicle, theft or fire, and certain legal liability for damage caused to another person’s vehicle or property.
Different levels of cover are available between insurers.
What is the difference between commercial motor and private motor insurance?
Commercial motor insurance is designed for vehicles used in business operations.
Some private motor policies may permit limited business use, but the type and extent of permitted use varies between policies.
The way the vehicle is genuinely used should therefore be disclosed when insurance is arranged.
Does CTP insurance cover damage to cars or property?
No. Compulsory Third Party insurance is concerned with bodily injury arising from motor vehicle accidents.
It does not replace insurance for damage to the insured vehicle or another person’s vehicle or property.
The operation of CTP and compulsory motor schemes differs between Australian jurisdictions.
Can several business vehicles be insured together?
Depending on the insurer and risk, commercial motor insurance may cover one vehicle or multiple business vehicles.
As the fleet grows, or where the business operates trucks or transports goods for others, a specialist fleet or transport insurance arrangement may need to be considered.
What information is needed for a commercial motor insurance quote?
Information commonly includes the vehicles, their values and use, regular drivers, garaging location, claims history, accessories or modifications and the type of cover required.
Additional information may be required depending on the vehicle and business activity.
RMA Insurance Brokers can help identify the information required before approaching insurers.
Related insurance
Plant & Equipment Insurance
Cover considerations for owned, hired-in or hired-out plant, machinery, equipment and tools used in business operations.
Farm Motor & Agricultural Machinery Insurance
Cover considerations for farm utes, trucks, tractors, harvesters and other machinery used on or away from the property.
Business Insurance
Broader insurance for business property, interruption, theft, equipment and other commercial risks.
Motor Fleet & Carriers Liability Insurance
Insurance considerations for transport operators and businesses running multiple vehicles, heavy vehicles or trailers.
Private Motor Insurance
Cover considerations for privately used cars and other eligible vehicles, including agreed or market value, drivers and use.
Liability Insurance
Public and products liability insurance for third-party injury and property damage exposures.
Review your commercial motor insurance
Vehicles, drivers and business operations can change over time.
Whether you are insuring a business vehicle for the first time, reviewing existing cover or adding vehicles to the business, RMA Insurance Brokers can assist.
The information on this page is general information only and does not take into account your objectives, financial situation or needs. Cover is subject to the terms, conditions, limits and exclusions of the relevant policy. Insurance products and available cover vary between insurers. Please review the relevant policy documentation and obtain advice appropriate to your circumstances before making a decision.