Fleet News

Firms fail to check up on car insurance

HALF of the UK's companies are failing to undertake basic checks to ensure staff are properly insured to drive on business, new research reveals.

According to the findings, covering more than 73,000 vehicles and 400 companies, 49% of businesses failed to check the insurance of employees required to drive on company business.

The situation is further complicated by the growth of cash-for-car schemes, as drivers using private vehicles for business use will fall outside of company vehicle insurance schemes and may not have insured themselves properly.

The research by HSBC Vehicle Finance says the issues are multiplied because there is no standard definition of business use cover, which varies according to each individual insurer.

Further complications are caused when business use is limited just to the policyholder and not named drivers of a particular car.

Tim Holmes, head of HSBC Vehicle Finance, said: 'Any individual involved in a fatal accident while on company business in their private car without the correct insurance cover could expose that company to corporate manslaughter charges in the future.

'Checking insurance details is a labour intensive activity but not enough companies are undertaking this fundamental check. Insurance cover has its grey areas so it is vital that businesses give it careful attention, especially companies asking staff to use their private cars on company business.'

Insurance checklist

  • Do you send employees out in private cars on business?
  • Are they properly insured?
  • Are they a named driver on a policy? In which case they may not be insured for business use.
  • A trip to a hotel for a conference is permitted on private cover, but client visits on the way are not.
  • Have you considered Occasional Business Use (OBU) insurance to ensure your staff are fully insured?
  • Do you have processes in place to keep track of employees and their private cars used on business?
  • Have you considered the health and safety issues of sending out staff in private cars that might not be correctly maintained?
  • Have you considered providing company cars, instead of a cash alternative?
  • Have you considered using daily rental vehicles instead of staff-supplied cars? Source: HSBC Vehicle Finance
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