Understanding Comprehensive vs Third-Party Commercial Motor Insurance in the UAE: Which is Right for Your Business?

Introduction

When it comes to securing company cars, business trucks, and other commercial light and heavy vehicles, commercial motor insurance is an ideal option. Such an insurance plan obtained from trusted insurance service providers can not only cover unexpected financial loss but also protect your business reputation. Additionally, it saves from consequential lawsuits that may come up if a commercial vehicle meets with an accident while being uninsured. Anyways, when it comes to obtaining commercial motor insurance, business owners often get confused between two common options- comprehensive or third-party. It is indeed difficult to understand which of the two options is right for you. So, in this blog, we will discuss the details about the two types of commercial motor insurance and which one suits your business the best.

What are Comprehensive and Third-Party Commercial Motor Insurance in the UAE

Comprehensive commercial motor insurance is a policy plan that offers extensive coverage to different types of vehicles used for commercial purposes in case any damage or loss takes place to the vehicle, its driver, passengers, owner, and/or third-party liability. Whether it is a group of towing trucks, food delivery vans, or cars used for business travels, comprehensive commercial motor insurance covers all types of risks associated with them. It also pays off the legal expenses if any lawsuit is filed against the insured vehicle.

On the other hand, third-party commercial motor insurance is an effective policy plan to secure commercial vehicles from third-party liabilities which means covering damages and loss caused to other assets or people by the insured vehicle. Third-party commercial motor insurance is a part of the mandatory vehicle insurance regulations in many countries including the UAE. Covering medical expenses claimed by third parties and legal costs arising from the same issue ensures peace of mind for company owners.

However, both types of insurance can provide the respective coverages to vehicles including but not limited to: 

• Lightweight two-wheelers used for delivery
• Towing trucks 
• Construction vehicles 
• Utility trucks 
• Company cars used for business travels 
• Large goods vehicles like cargo vans and delivery trucks, etc.

Whichever type of vehicle your company uses, insuring them with a suitable policy plan should be a priority.

Comprehensive vs Third-party Commercial Motor Insurance: Which is Right for Your Business

While third-party commercial vehicle insurance fulfills the basic insurance requirement of a company involving business vehicles in the UAE, a comprehensive commercial motor insurance policy ensures almost 360° protection to the vehicles providing broad coverage. Here the most common question that is raised by business owners is about which insurance plan is more profitable for them. To find an answer to the question, we must look at the differences between these two major types of commercial vehicle insurance in the UAE.

• While comprehensive coverage includes diverse risks including theft, collision, natural disaster, and major and minor accidents, third-party coverage saves from crucial third-party liabilities. 
• A third-party commercial motor insurance is a basic, mandatory legal requirement for companies with vehicles whereas obtaining comprehensive coverage for commercial vehicles is optional. 
• The premium cost for comprehensive commercial motor insurance is higher than that of third-party policy for commercial vehicles.

While choosing any of the options, company owners need to reflect on their current needs and budget segregated for insurance purposes. Additionally, the value of the insurable vehicles, driving habits and training certificates of the drivers, and location of using the vehicles need to be kept in mind to obtain the best plan for your company vehicles. For example, if the company vehicles are new and supposed to be driven in harsh road conditions or accident-prone areas, it is wise to go for a comprehensive coverage plan for them. Consulting with reliable insurance service providers can guide you about all such details.

CoverB

CoverB, as a trusted insurance service provider in UAE, helps business owners, contractors, and individuals to obtain the best-suited comprehensive and third-party commercial vehicle insurance plans and many other insurance plans like machinery breakdown insurance, contractors’ all-risk insurance, and so on. CoverB is a one-stop destination to address the diverse corporate insurance needs of businesses. The experts from CoverB help in every phase of obtaining and maintaining an insurance policy. With a trusted insurance service provider like CoverB, understanding and leveraging insurance packages becomes easier than ever.

Final Words

In the long run, whether you would like to opt for a comprehensive plan or a simple third-party policy for your company vehicles, it’s up to your own discretion. Although SMEs sometimes are likely to go for basic third-party commercial motor insurance plans, they are also recommended to obtain a comprehensive plan if possible. Businesses using mostly rented vehicles may continue with third-party coverage plans. On the contrary, large enterprises with a wide range of corporate fleets shouldn’t delay in obtaining comprehensive commercial motor insurance plans.