What is Compulsory Third Party (CTP) Business Insurance?
Compulsory Third Party (CTP) insurance is a policy required for all vehicles registered in Australia. Also known as a green slip, CTP insurance protects against personal liability claims in car accidents where you are the driver at fault. If, for instance, a person is injured or killed in a collision and you are the responsible driver, CTP Insurance will provide compensation for any costs involved.
CTP insurance protects the driver of the vehicle involved in a collision, even if they are not the owner. This means if a friend or family member borrows your car and is involved in an accident, they will be covered by insurance. CTP insurance does not cover damages to vehicles or any other property but rather is a policy aimed at making the roads safer by ensuring anyone who is injured in an accident on the road has access to medical compensation.
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Who Needs CTP Business Insurance Cover?
CTP business insurance is a mandatory requirement for registering a business owned vehicle in Australia. In some states, like Tasmania and South Australia, the cost of the insurance policy is included in the registration fee while if you live in New South Wales, Queensland or the Australian Capital Territory (ACT), you are responsible for purchasing CTP insurance and choosing your insurer.
CTP business insurance will provide cover for any vehicles registered with your business. Instead of registering each car individually, you can purchase CTP business insurance to fast-track the registration process and make sure all vehicles associated with your business are covered in the case of an accident. Like CTP insurance, this policy protects you against personal injury claims. This includes drivers, pedestrians, passengers, motorcyclists, bicyclists or any other injured parties. CTP business insurance protects company vehicles from liability claims. It is a safeguard against the high cost of compensation and a mandatory requirement when registering a vehicle.
How Does CTP Business Insurance Cover Work?
Covers Expenses. The most immediate benefit of CTP business insurance is that it covers the high cost of personal injury claims. Car accidents often result in serious injuries such as brain damage and spinal trauma. Caring for a patient with injuries such as these can be costly. If you are not insured, you will be liable to pay these expenses out of pocket. With CTP business insurance, you and any vehicle you list with the insurer are covered for these claims.
Ongoing care. As part of your CTP business insurance policy, some insurers will provide ongoing care to the victim of the car accident. Recovering from an accident can be a lengthy process. Because of this, many insurers include a provision to cover the cost of continued care in their CTP business insurance policies. Instead of providing a lump-sum compensation payment, the insurer accepts an ongoing financial responsibility for the rehabilitation of the victim.
Tailored Cover. CTP business insurance is flexible and can be tailored to suit the specific needs of any company or eventuality.
Useful CTP Business Insurance Definitions
For a better understanding of CTP business insurance, it is important to check how the terms and conditions are defined by the policy. For example:
An injury is defined as any medical impairment that arises within six months of a motor accident and is verified by doctor to have been directly caused by this accident.
Loss applies to the complete and permanent loss of a previously operational body part of function.
Motor vehicle refers to the vehicle insured with CTP business insurance.
Motor accident is defined as an accident or incident resulting in a person or person’s injury or death as the direct result of an incident involving motor vehicle. The term encompasses accidents caused during the driving of a motor vehicle, a collision involving a vehicle and instances of a motor vehicle losing control.
Fleet is used to describe ten or more vehicles owned by the person insured at the time of the motor accident.
While CTP business insurance covers many of the expenses in an accident, there are some exclusions. CTP business insurance does not cover the following:
- Property damage. CTP business insurance only covers the repair costs for vehicles named in the policy. If property, such as a building or home exterior are damaged as a result of the accident, you will also be held personally responsible for the compensation.
- Driver’s medical expenses. CTP business insurance will not cover the cost of the medical expenses of the at fault driver. If you or the driver of your car sustain an injury in a car accident, you must pay the resulting medical bills for treatment and care.
- Overseas accidents. If you are the driver to blame in a car accident overseas, you will be accountable for all property and personal injury damages.
- Unregistered vehicles. A car that is unregistered or in an unroadworthy condition cannot be covered by CTP business insurance. If the car was driven by an unlicensed driver at the time of the accident, you will also be responsible for the damages.
- Failure to report incident. In order to be covered by CTP business insurance, you must report the motor vehicle accident to the police within 28 days.
- Criminal activity. If the accident was a direct or indirect result of driving under the influence of drugs and/or alcohol (in excess of the legal limit), you will not be covered for the resulting damages. This also applies to any situation where an illegal activity was the cause of the accident.
CTP Business Insurance Costs
The cost of insuring your car with CTP business insurance varies depending on which state you are in. In Tasmania, where the policy is included in a car's registration, you can expect to pay $364 for a private motor car. In New South Wales, Queensland and the ACT, insurance premiums depend on the car’s condition, named drivers and its purpose (i.e. commercial). A driver with a history of accidents will pay a higher premium than a driver who has made no claims. Age is another factor, drivers under the age of 25 are considered to be at higher risk of an accident. In New South Wales, the fees of CTP business insurance also depend on whether you apply for a tax invoice green slip. This is more costly than standard CTP business insurance but allows you to claim GST from the Australian Tax Office.
Cancelling CTP Business Insurance
A CTP business insurance policy is valid as long as your vehicle is registered. To cancel your policy, you will first need to cancel the vehicle’s registration with the Roads and Traffic Authority or Queensland Transport, depending on if you are registered in New South Wales or Queensland. In Queensland, if you purchase a policy but do not use it to register a vehicle, you can receive a full refund if you return the insurance to the insurer within 30 days of purchase. In all other cases, you will need to wait for your transport agency to send you a confirmation letter that states your registration has been cancelled. Once you receive this letter, you must present it to your CTP business insurer. They will then proceed with your policy cancellation and any unused portion of the premium will be refunded to you.
Frequently Asked Questions About CTP Business Insurance
There are a number of factors you should take into consideration when looking for professional indemnity insurance for architects and surveyors.
- What does my CTP business insurance cover?.This policy covers the cost of injury to third parties involved in motor vehicle accidents where you are the driver at fault. It also covers any injury to drivers, passengers, pedestrians and other road users who are hurt in the incident.
- What doesn’t my CTP business insurance cover?With CTP business insurance you are not covered for accidental property damage or for the treatment of your own medical injuries. This means you will be held personally responsible for any damages to your car or the car of a third-party.
- What happens to the policy when I sell my car?If you sell your car, the new owner inherits your CTP business insurance policy. If you wish to sell you car without insurance, you will need to cancel the vehicle registration with your local transport authority.
- How do I cancel my CTP business insurance policy?You must contact your local transport authority to cancel the registration of your vehicle. Once you have done this, you will receive a letter confirming the cancellation and this you can refund the portion of policy that is applicable.
- What happens if I don’t have CTP policy? If you are involved in an accident in an unlicensed vehicle you may be held financially accountable for all damages to the injured person.When registering your car, you must chose a CTP provider.
- How can I change my CTP insurance provider?This provider covers you for the duration of your registration period and cannot be changed until the beginning of the next period. If you wish to change providers mid-registration, you must de-register your vehicle and begin the registration process again with a new CTP insurance provider.
Compulsory Third Party business insurance is a liability policy against damages caused in an accident where you are the driver at fault. It covers personal injury claims made by third-parties such as passengers and pedestrians who have been injured as a direct cause of the motor accident.
Compulsory Third Party (CTP) business insurance provides compensation to third-party victims of motor vehicle accidents. If you are the driver at fault in a motor accident, CTP business insurance will covers you from personal injury claims made by third-parties including other drivers, passengers and pedestrians. This policy also covers you for loss of life and the ongoing care of any injured parties. It does not cover accidental property damage or personal medical costs. Other exclusions may apply depending on the CTP business insurance provider. CTP insurance is mandatory for all vehicles registered in Australia. If you have an accident in an unlicensed vehicle, without CTP insurance you will be held financially responsible for all damages. Drivers in New South Wales, Queensland and the Australian Capital Territory have the option of choosing their CTP provider. The premiums you pay on CTP business insurance depend on what car you have, where it is garaged, who the driver is and what it is used for.