Car Insurance, Social, Domestic, Pleasure and Commuting

CurlyT

Hello all,

I have for while now had a quiet word with new employees (unofficially) regarding using their own vehicles to "run little errands" for the company we work at.

It surprises me on two counts that 1) So many employees do not realise the insurance implications of having an accident whilst running these errands, 2) How blaise my company is in asking people to do this without any kind of warnings.

My post is just a quick one really, to fact check, that I am correct in my thought process, that if an employee is on company business (even if it is running the post to the post office, or collecting a bag of nuts and bolts for a job at the factory), and has a bump, there is a strong possibility their insurance company could argue their way out of paying up?

I also mention that if they are asked to work between sites, then they could also fall foul as most policies only cover to and from one place of work?

Does anyone have experience of being on either side of this happening to them for context?

Cheers

CurlyT

Mildly_Miffed

You are absolutely correct.

"Commuting" covers travel to and from your usual place of work - nowhere else, and no other use. If somebody normally works from home, that's their usual place of work.

Not just the risk of not paying after an accident - police will often ask the purpose of a journey when stopping somebody for other reasons. A conviction for driving uninsured can often follow. If somebody's a new licence holder, they're at risk of their licence being revoked.

Frozen_up_north

It usually costs very little extra to include business insurance, although that is not likely to cover any goods you maybe carrying between sites, to a courier/post office.

I have been retired several years, but others have mentioned around £10~15 extra, plus change fee.

CurlyT

Frozen_up_north said:

It usually costs very little extra to include business insurance, although that is not likely to cover any goods you maybe carrying between sites, to a courier/post office.

I have been retired several years, but others have mentioned around £10~15 extra, plus change fee.

Yes you are correct, in fact for me personally it cost about £4.50, so absolutely should be done.  I shall continue my one man crusade of knowledge spreading!

Curly

DullGreyGuy

CurlyT said:

I have for while now had a quiet word with new employees (unofficially) regarding using their own vehicles to "run little errands" for the company we work at.

It surprises me on two counts that 1) So many employees do not realise the insurance implications of having an accident whilst running these errands, 2) How blaise my company is in asking people to do this without any kind of warnings.

My post is just a quick one really, to fact check, that I am correct in my thought process, that if an employee is on company business (even if it is running the post to the post office, or collecting a bag of nuts and bolts for a job at the factory), and has a bump, there is a strong possibility their insurance company could argue their way out of paying up?

I also mention that if they are asked to work between sites, then they could also fall foul as most policies only cover to and from one place of work?

Does anyone have experience of being on either side of this happening to them for context?

Its normally a pyramid..

Hire and reward - explicitly being paid to carry someone or something from A to B where payment is intended to be profit making 

Business Class 3 - where driving is a material part of the job and can include carrying samples/demonstration items etc (eg your typically travelling sales man)

Business Class 1 & 2 - where driving is a consequential part of the job (eg driving to another office or an occasional trip to see a customer). 1 is policyholder only, 2 is policyholder + named driver but in many cases for 2 it has to be for the same business

Commuting - getting to or from a single permanent place of work and home, includes part journeys (eg to the train station to then catch the train to the office) but excludes journeys interrupted for business use (eg stopping off at the hardware store on the way to pick up supplies). 

Social Domestic and Pleasure - your day to day driving to go to the shops, see friends, give a lift to a friend without receiving material payment etc. 

You go from the top down, when you hit one that is something you do, thats the class you need. They include any classes below (though be a touch careful if you need Class 3 and for a named driver)


Were you to have an accident when using the vehicle not inline with the policy you would ultimately be liable for all costs incurred. 

https://www.financial-ombudsman.org.uk/decision/DRN-3847141.pdf

The above is a reasonable good case where the customer tried several tricks to argue it wasnt their fault about not having the right class of use but ultimately they've had their £5,000 car written off, incurred £750 of storage charges and yet to hear about how much the third party is suing them for. 

Its also interesting because there was a consideration of if this falls into CIDRA which is about false declarations when taking out a policy but as its more fundamental and its clear commuting was excluded the ombudsman decided it didnt and so instead comes under the RTA and policy terms

Aretnap

Frozen_up_north said:

It usually costs very little extra to include business insurance, although that is not likely to cover any goods you maybe carrying between sites, to a courier/post office.

If you want your policy to cover items that you are carrying then you would need goods in transit insurance - pretty much no standard consumer motor policy will cover the car's contents to any significant degree (even for personal items).

However if the goods are of low value (a few letters, or a bag of nuts and bolts or whatever) then whether or not they are covered is probably the least of your worries. As above the potential consequences of driving for business without proper insurance include a conviction for driving without insurance, and a rejected claim which means potentially unlimited liability if it's a big accident that causes serious damage or injury. The company and the managers could also be prosecuted if they allow (or worse, encourage) employees to use their cars for business use without proper insurance - which is why most large companies will insist on seeing your insurance certificate before you can claim expenses for driving on company business.

People often say "well I'll just say I was doing something else"; regardless of your view on the morality of this they still get caught it because most people aren't actually very good liars, especially in stressful moments (like just after an accident, or on being stopped by the police).

As you say the cost of adding business use to car insurance is often little more than pennies, which should be factored into the 45p/mile (or whatever it is these days) that they can (hopefully) claim for running errands in their own cars.

QrizB

It's a little while since my school days, but aren't employers also vicariously liable for their employees' acts? So if (for example) one of the OP's colleagues was to have an uninsured 3rd party liability, the employer (or at least their public liability insurer) could also be on the hook for it?

DullGreyGuy

QrizB said:

It's a little while since my school days, but aren't employers also vicariously liable for their employees' acts? So if (for example) one of the OP's colleagues was to have an uninsured 3rd party liability, the employer (or at least their public liability insurer) could also be on the hook for it?

Their PL insurers highly unlikely, PL will explicitly exclude motor accidents.

If they were driving a company car and there was a problem with the insurance (eg they were below the minimum age for the any driver policy) then absolutely

If they were in their own car and it was during commuting then almost certainly not

If it's their own car and it was running an errand for their employer then possibly. A prudent company at a minimum if they are explicitly asking you to use your own car would have you sign a declaration that you've a license, appropriate insurance, arent driving drunk etc. More prudent would be to check their certificate of insurance periodically. 

It gets a lot greyer though if someone gets to the office (so commuting) and then decides actually it would suit their purposes more to be working from the other office so at lunch, at their own decision and without consultation drives there, even more so if, for example, they were borrowing their partners car that day because their own was in the garage. 


I've worked for a single company that had an explicit requirement to inspect your motor certificate every 12 months else you shouldn't use your car and they wouldn't pay expenses. Some other companies its been in the company travel policy that you are required to read and attest to having done so. For the majority it's not something thats been brought up. 

In my claims days we had a lot of commuting based declined claims, cannot remember off hand any business class ones. 

QrizB

Thanks, it was the "running an errand" example that I had in mind. I've got dim memories of employees being on "a frolic of their own" or not, as the case might be ...

daveyjp

A friend was once in an accident, the other driver who drove into him while he was at traffic lights was doing an errand for her company.

The other party had no business cover so it ended up expensive for her as she was charged for no insurance and the damage to her car wasn't covered. 

It was also slightly embarrassing for the legal practice she worked for.
.

LightFlare

CurlyT said:

Hello all,

I have for while now had a quiet word with new employees (unofficially) regarding using their own vehicles to "run little errands" for the company we work at.

It surprises me on two counts that 1) So many employees do not realise the insurance implications of having an accident whilst running these errands, 2) How blaise my company is in asking people to do this without any kind of warnings.

My post is just a quick one really, to fact check, that I am correct in my thought process, that if an employee is on company business (even if it is running the post to the post office, or collecting a bag of nuts and bolts for a job at the factory), and has a bump, there is a strong possibility their insurance company could argue their way out of paying up?

I also mention that if they are asked to work between sites, then they could also fall foul as most policies only cover to and from one place of work?

Does anyone have experience of being on either side of this happening to them for context?

Cheers

CurlyT

What relationship/position do you have within the company ?

Are you their manager are you above/below the hierarchy of the people requesting the errands ?

I wouldnt get involved UNLESS it would be deemed to be part of your duties