A new insurance policy designed for leasing companies has been launched – but could end up costing fleet managers.

Lease Protect, developed by Reassure, is aimed at manufacturers, fleet insurers, leasing companies and other asset owners.

It insures the condition of leased vehicles on their return, based on either manufacturer or British Vehicle Rental and Leasing Association standards.

If a vehicle is returned damaged, it will be repaired and the costs covered by the insurance.

One car manufacturer has already made the insurance mandatory for all its lease customers while another is considering following suit.

While this means lease companies may be obliged to take out the extra cover, many will pass it – and the cost – on to their fleet operator customers.

The cost averages around £15 per vehicle per month, although lease companies can add a margin.

Reassure director John McLean said: “Fleets benefit as they have fixed costs in advance and know the condition the vehicle should be returned in, avoiding end-of-lease disputes.”