Duty of care
Insuring Grey Fleet Drivers
This is a minefield so exercise great care.
If you have used our ‘Grey Fleet Register’, your Grey Fleet drivers will have provided proof of business insurance cover and signed a declaration to that effect.
Are Your Grey Fleet Drivers Really Insured?
Even if they have provided an insurance certificate to back up the declaration, still be careful. Fleet management companies are still reporting a fifth of insurance certificates checked do not have appropriate cover
- Drivers sometimes do not understand what they need so their policy does not cover them properly.
- The insurance certificate itself provides very basic information and does not always provide the important details.
Taking the insurance issue first, for example, if a policy is issued for any driver over 25, the certificate of insurance will just say any driver, and make no mention of the age limitation.
It is the policy schedule in conjunction with the policy booklet which gives precise information. To be on the safe check all three, certificate, policy schedule and policy booklet.
With regard to a driver’s understanding if motor insurance, many are not aware of the following;
There are generally five types of general motor insurance 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 think commuting would also include a trip to another of the company’s locations. However, commuting in the policy only refers to the employee’s usual, permanent place of work.
The types of business cover;
Class one covers the vehicle in connection with the driver’s job, for example driving to different sites away from their place of work. It may also cover a spouse for the business use, but not another named driver – so it’s important to check the insurer’s wording. It will exclude commercial use (such as the delivery of light goods) and selling (such as door-to-door).
Class two has a number of variations depending on the insurance provider. The policy will usually cover both the policyholder and a named driver for the business use, although some insurers may stipulate that the two must work in the same occupation. Class two will still exclude commercial use and selling.
Class three will provide business cover for the transportation of light goods, for example meals or flower delivery, and some selling purposes such as door-to-door sales.
Class one covers most drivers, from the managing director travelling to meetings all over the country or the office junior who drives to the bank once a week.
Any employee on a PCP or using their own car for business will need either class one or three depending on their job. Not many people who use their own car for work allow their colleagues to drive as well, so class two would be unusual.
To sum up, there are different definitions depending on the use of the vehicle, the employee needs to fully declare the nature of their business to the insurer.
Insurance certificate checks could be done quarterly or annually or, ideally, when the policy is being renewed.
You may consider alleviating the risk by extending the company’s insurance but it often makes the premium too expensive for a few extra journeys.