Commercial motor insurance: what it covers and who carries it

What the policy covers

Damage to the insured vehicle, and legal liability for damage the vehicle causes to other people’s property, are the two halves. Theft of the vehicle, and often of items in it, sits in the same policy, though tools carried in a ute are frequently limited and are more usually insured under tools of trade cover.

Where a business runs several vehicles, a fleet policy rates them together rather than individually, which changes how claims history feeds back into the premium.

Where business use changes the answer

A vehicle insured for private use and used to carry tools, stock or workers is being used for something the insurer did not price. The consequences appear at claim time rather than at renewal, which is why the problem is invisible until it is expensive.

Carrying goods that belong to customers is a further step again: that is a transit exposure, and goods in transit cover is the class written for it.

What people get wrong about it

The first error is thinking compulsory third party is business insurance. It covers injury to people and nothing else — not the vehicle, not the other car, not the fence.

The second is assuming a personal policy stretches to cover work use because the vehicle is the same vehicle. The use is what is rated, not the badge.

The third is expecting tools in the vehicle to be fully covered by the motor policy. Sub-limits for tools are common, and the schedule is where that is settled.

Questions

Is compulsory third party enough for a work ute?

Compulsory third party covers injury to people arising from the use of the vehicle. It does not cover damage to the ute, damage to anything the ute hits, or theft. Those are the questions a commercial motor policy answers.

Are my tools covered while they are in the vehicle?

Often only to a limited amount, and sometimes only where the vehicle was locked or secured. Tools of trade cover is written specifically for tools and travels with them rather than with the vehicle.

Occupations that commonly carry it

Ordered by how central this cover is to each occupation in the graph. A pattern in the data, not a statement that any business is required to hold it.

• Couriers — Parcel and document delivery, usually as an owner-driver under a principal’s contract.
• Truck operators — Heavy vehicle freight operation, as an owner-driver or a small fleet.
• Removalists — Household and office removals, handling other people’s goods end to end.
• Taxi operators — Licensed point-to-point passenger transport.
• Rideshare drivers — Booked passenger transport through a platform, requiring accreditation in most states.
• Bus and coach operators — Charter, school and route passenger services under an operator accreditation.
• Freight forwarders — Arranging carriage of goods for shippers, usually under trading conditions.
• Warehouse operators — Storage and handling of goods belonging to customers.
• Tow truck operators — Licensed towing and vehicle recovery, moving customer vehicles.
• Delivery riders — Food and small-parcel delivery by bicycle, scooter or motorcycle.
• Livestock transporters — Carriage of livestock, with welfare obligations alongside the freight risk.
• Skip bin operators — Delivery and collection of waste bins to domestic and commercial sites.
• Waste contractors — Collection, transfer and disposal of commercial and construction waste.
• Food truck operators — Mobile food service, trading across council areas and at events.
• Mobile mechanics — Vehicle servicing performed at the customer’s home or workplace.
• Caterers — Preparation and service of food off-site, at venues and private homes.
• Funeral directors — Arrangement and conduct of funerals, holding prepaid money in many cases.
• Farmers — Primary production of crops and livestock, with plant, property and liability exposures.
• Agricultural contractors — Contract farm work such as sowing, baling and cultivation using own machinery.
• Shearing contractors — Contract shearing and wool handling, supplying teams to properties.
• Irrigation contractors — Design and installation of irrigation systems for farms and grounds.
• Spray contractors — Licensed application of agricultural chemicals, by ground rig and aerially.
• Harvest contractors — Contract harvesting with headers and haulage during a narrow seasonal window.
• Viticulturists — Vineyard operation and management, with crop, plant and visitor exposures.
• Electricians — Licensed electrical work, from domestic fit-outs to commercial and industrial installation.
• Plumbers — Licensed plumbing, drainage and gas-fitting work across domestic and commercial sites.
• Carpenters — Structural and finish carpentry, framing, formwork and fit-out.
• Builders — Licensed building work as principal contractor on residential or commercial projects.
• Handypersons — General maintenance and repair work below the licensing thresholds of the specialist trades.
• Roofers — Roof installation, restoration and plumbing-adjacent roof drainage work at height.
• Painters — Interior and exterior painting and decorating, domestic and commercial.
• Tilers — Wall and floor tiling, waterproofing-adjacent work in wet areas.
• Landscapers — Hard and soft landscape construction, including retaining, paving and irrigation.
• Concreters — Formwork, placement and finishing of concrete slabs, driveways and structural elements.
• Scaffolders — Erection, alteration and dismantling of scaffolding, a high-risk licensed activity.
• Welders — Structural and fabrication welding, including hot work on site.
• Solar installers — Design and installation of photovoltaic and battery systems, an accredited electrical specialisation.
• HVAC technicians — Installation and servicing of heating, ventilation, air conditioning and refrigeration plant.
• Earthmoving contractors — Excavation, bulk earthworks and site preparation using mobile plant.
• Demolition contractors — Licensed demolition and strip-out, including work adjacent to hazardous materials.
• Arborists — Tree assessment, pruning and removal, frequently near structures and services.
• Pest control technicians — Licensed application of pesticides and termite management for domestic and commercial property.
• Bricklayers — Brick, block and masonry walling for residential and commercial structures.
• Plasterers — Wall and ceiling lining, cornice, rendering and set finishing.
• Glaziers — Supply and installation of glass in windows, doors, shopfronts and balustrades.
• Waterproofers — Membrane and tanking work to wet areas, balconies, roofs and below-ground structures.
• Stonemasons — Cutting, dressing and installing natural and engineered stone, including benchtops and cladding.
• Cabinet makers — Manufacture and installation of joinery, cabinetry and built-in furniture.
• Shopfitters — Fit-out of retail and commercial tenancies, usually working to a landlord’s conditions.
• Flooring installers — Laying timber, vinyl, laminate and carpet in domestic and commercial spaces.
• Insulation installers — Installation of thermal and acoustic insulation in roofs, walls and subfloors.
• Fencing contractors — Boundary, security, pool and rural fencing, including gates and automation.
• Paving contractors — Laying pavers, kerbs and hard surfaces for driveways, paths and public areas.
• Asphalt contractors — Surfacing and resurfacing of roads, car parks and driveways with hot-mix and bitumen.
• Civil contractors — Roads, drainage, subdivisions and utilities work, usually under principal-supplied contracts.
• Steel fixers — Placing and tying reinforcement before concrete pours.
• Structural steel erectors — Erection of structural steel frames, portal frames and mezzanines.
• Riggers — High-risk licensed rigging and dogging work supporting lifts and structural erection.
• Crane operators — Operation and hire of mobile and tower cranes, usually with an operator supplied.
• Formworkers — Construction and stripping of formwork for suspended slabs, walls and columns.

Sources

• Moneysmart (ASIC) — General guidance on business insurance from the regulator’s consumer site. A starting point, not a definition of this cover.