Your grey fleet drivers have signed a statement declaring their vehicle is insured for business use.

You assume they have the appropriate cover.But without checking their insurance certificates, can you really be sure?

Of the 6,000-7,000 grey fleet insurance certificates checked by Alphabet every year, about 20% do not have the appropriate cover.

“Drivers don’t understand what they need and it doesn’t cover them properly,” says Diarmuid Fahy, manager fleet risk services at Alphabet.

There are generally five types of cover:

• Social, domestic and pleasure, excluding commuting
• Social domestic and pleasure, including commuting
• Class one business use
• Class two business use
• Class three business use

The first two types do not cover business use but employees do not always realise.

“A common mistake is to think that ‘commuting’ is sufficient,” says Fahy.

“A lot of people assume that going to another office is commuting but it’s not the employee’s usual, permanent place of work. People don’t know what they are insuring themselves for and go for the lowest cost.”

Some grey fleet drivers are guilty of not checking the insurance certificate. “Some certificates are very clear,” says Fahy. “Some state that it does not include business use.”

However, not all insurance certificates are black and white and can cause confusion for the fleet manager checking them as well as the drivers.

A random sample of insurance certificates which Fleet News checked all contained slightly different wording.

Gareth Roberts, fleet manager at Natural Resources Wales, says: “Some certificates are quite woolly. If I don’t see business use on there I challenge the employee to get confirmation from their insurer.”

Some insurers include ‘business use’ as standard while others won’t cover it at all.

Understanding the anomalies can be a nightmare if you have a significant number of grey fleet drivers and have only just taken on grey fleet responsibility, as one fleet manager found out (see case study).

Steve Stock, senior motor underwriter at Zurich Global Corporate, says: “There are hundreds of definitions because of all of the dot.coms.

"Each one will have a different take on business insurance. It’s a licence to price policies differently in the personal lines arena.”

Mark Sherman, manager commercial motor at Allianz, agrees that it’s a “recognised issue”, but says that the insurer should give a definition at the start of the document.

“There are different definitions depending on the use of the vehicle,” he says. “The employee needs to fully declare the nature of their business.”

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