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Motor insurance – are you sure you’re covered?

Motor insurance can be a headache for fleet managers, particularly when it comes to renewal. Specialist commercial fleet insurance is the most obvious cover. But what’s the situation for personnel using their own vehicle for work purposes? Not having the right cover can result in prosecution, increased insurance premiums, costly legal expenses and damage to business reputation.

Generally, if someone is using a car to drive to work and other sites, they need business Class 1 cover. Add a named driver for business purposes and it’s Class 2. It’s Class 3 if they drive many miles and carry business goods.

Having no insurance is a strict liability offence. If a vehicle is stopped by a police officer and found without insurance, there is no defence. At the roadside, the police can impose a fixed penalty, which is usually a fine of £300, and add up to six points to the driver’s license. Cases that go to court can result in stiffer penalties, with fines of up to £5,000 and the driver’s license endorsed with up to a maximum eight penalty points. In some cases, a driver can be disqualified from driving for two to 12 months.

In the event of an accident, the other driver’s insurance company may seek to recover damages. Your insurer is unlikely to pay out if they find any discrepancy between the vehicle use and the policy schedule, resulting in hefty legal bills and worse if the vehicle wasn’t insured at all.

Companies that encourage car sharing to reduce their environmental footprint should ensure their staff have the right cover when driving to work. Social domestic and pleasure (SDP) cover should be sufficient. However, insurers which offer ‘commuting’ coverage may only pay out on claims made in these circumstances if the commuting coverage is in place.

Keeping insurance companies updated on changes, no matter how minor, and generally erring on the side of caution, is all that is usually required to keep your team covered, legal and on the road. The potential penalties far outweigh the costs. The right insurance cover is a price worth paying.

This article first appeared in Fleet News.