UK duty of care: Valid car insurance cover is a must UK duty of care: Valid car insurance cover is a must

UK duty of care: Valid car insurance cover is a must
10 May 2018

UK employers spend an estimated £5.5 billion (US$7.4 billion) each year on 14 million grey fleet vehicles for use by their executives.

Of that 14 million, 11.8 million of these cars, which are offered as a perk for business use, belong to private sector and a further 2.2 million to public sector organisations, according to statistics from the British Vehicle Rental and Leasing Association. 

But regardless of the reason for making any given journey, employees must, at the very least, have class one business insurance to ensure they are properly protected. Unfortunately though, not everyone has the right cover. In fact, our research shows that a significant 21% of drivers would fail insurance checks and could, therefore, be ineligible to drive for work purposes.

Specifically, 12% have no business insurance, which means it is illegal for them to make work-related journeys of any kind. Worryingly, a further 9% also had out of date insurance policies, which would mean they were not insured to drive at all.

But this shocking set of statistics points to an issue that employers cannot afford to ignore – that their employees could be breaking the law, whether inadvertently or on purpose. For example, we discovered in one instance that an employee did not have a driving licence but was regularly making work-related trips.

The implications

The implications of this situation for employees are obvious: roadside fines of £300 (US$406) and six penalty points on their driving licence. If the case goes to court, they face unlimited fines, being disqualified from driving and having their vehicle seized and destroyed.

But employers may also be liable for fines and potentially worse if they are considered not to have carried out the necessary checks of employees’ driving licences, MOT (Ministry of Tranport) road-worthiness certificates and insurance documents.

They are also legally obliged under the UK’s Health and Safety at Work Act to check at least once a year that their staff are safe and legally allowed to drive for work purposes. If an employee is involved in an accident, the police and Health and Safety Executive (HSE) may check whether the correct policies and procedures were in place and that you complied with your duty of care obligations.

Both organisations may take punitive action if this is not the case – and such measures could well be exacerbated if the HSE finds that employers have been looking the other way and ignoring bad habits, or that they failed to be proactive in promoting safe driving practices.

How to fulfil your duty of care obligations

In other words, it is important to put processes in place to demonstrate that you are meeting your duty of care obligations. For example, the MOT certificate, driving licence and insurance documents of all drivers should be checked at least once a year. In the case of higher risk drivers – those with penalty points – more regular checks would be advised. And keep copies of all documents.

Unfortunately, it is impossible to prevent risky drivers from speeding and and you are unlikely to prevent accidents simply by checking documents. But doing so does demonstrate to both the HSE and your employees that you have their wellbeing in mind. Updating company handbooks to include safe driving advice and guidance will also show that you take your duty of care responsibilities seriously.

Nonetheless, there are a few issues to bear in mind when checking documents. Firstly, it is a time-consuming process, and documentation, whether electronic or physical, will inevitably take up storage space. Secondly, it can be difficult to determine whether employees have the right insurance cover.

Documents from insurance providers tend to be worded very differently. Some clearly state if the policy holder has been awarded business insurance and others do not make it clear at all. As a result, it is easy to see why some employees think they have the right cover when they do not.

A third challenge is that some employees may push back on having to change their insurance, particularly if their premium could go up. It is down to each individual company as to whether they are prepared to make up any difference.

If staff members are unhappy about making the change, one option is to stop paying their travel expenses until they do. Although such a move may appear draconian, if an accident takes place and insurance has not been checked, or expenses are still being paid, the HSE could bring the Corporate Manslaughter and Corporate Homicide Act 2007 into play. This legislation includes personal liability for senior directors.

Such a scenario could, of course, have very serious consequences and, for the sake of a few simple checks, it is simply not worth it. 

 Adam Bamford

Adam Bamford is Expedite services manager at Selenity. He took on the role in December 2015 having previously been part of the company’s commercial business development team, which launched the outsourced expenses service for large businesses earlier that year.

UK employers spend an estimated £5.5 billion (US$7.4 billion) each year on 14 million grey fleet vehicles for use by their executives.

Of that 14 million, 11.8 million of these cars, which are offered as a perk for business use, belong to private sector and a further 2.2 million to public sector organisations, according to statistics from the British Vehicle Rental and Leasing Association. 

But regardless of the reason for making any given journey, employees must, at the very least, have class one business insurance to ensure they are properly protected. Unfortunately though, not everyone has the right cover. In fact, our research shows that a significant 21% of drivers would fail insurance checks and could, therefore, be ineligible to drive for work purposes.

Specifically, 12% have no business insurance, which means it is illegal for them to make work-related journeys of any kind. Worryingly, a further 9% also had out of date insurance policies, which would mean they were not insured to drive at all.

But this shocking set of statistics points to an issue that employers cannot afford to ignore – that their employees could be breaking the law, whether inadvertently or on purpose. For example, we discovered in one instance that an employee did not have a driving licence but was regularly making work-related trips.

The implications

The implications of this situation for employees are obvious: roadside fines of £300 (US$406) and six penalty points on their driving licence. If the case goes to court, they face unlimited fines, being disqualified from driving and having their vehicle seized and destroyed.

But employers may also be liable for fines and potentially worse if they are considered not to have carried out the necessary checks of employees’ driving licences, MOT (Ministry of Tranport) road-worthiness certificates and insurance documents.

They are also legally obliged under the UK’s Health and Safety at Work Act to check at least once a year that their staff are safe and legally allowed to drive for work purposes. If an employee is involved in an accident, the police and Health and Safety Executive (HSE) may check whether the correct policies and procedures were in place and that you complied with your duty of care obligations.

Both organisations may take punitive action if this is not the case – and such measures could well be exacerbated if the HSE finds that employers have been looking the other way and ignoring bad habits, or that they failed to be proactive in promoting safe driving practices.

How to fulfil your duty of care obligations

In other words, it is important to put processes in place to demonstrate that you are meeting your duty of care obligations. For example, the MOT certificate, driving licence and insurance documents of all drivers should be checked at least once a year. In the case of higher risk drivers – those with penalty points – more regular checks would be advised. And keep copies of all documents.

Unfortunately, it is impossible to prevent risky drivers from speeding and and you are unlikely to prevent accidents simply by checking documents. But doing so does demonstrate to both the HSE and your employees that you have their wellbeing in mind. Updating company handbooks to include safe driving advice and guidance will also show that you take your duty of care responsibilities seriously.

Nonetheless, there are a few issues to bear in mind when checking documents. Firstly, it is a time-consuming process, and documentation, whether electronic or physical, will inevitably take up storage space. Secondly, it can be difficult to determine whether employees have the right insurance cover.

Documents from insurance providers tend to be worded very differently. Some clearly state if the policy holder has been awarded business insurance and others do not make it clear at all. As a result, it is easy to see why some employees think they have the right cover when they do not.

A third challenge is that some employees may push back on having to change their insurance, particularly if their premium could go up. It is down to each individual company as to whether they are prepared to make up any difference.

If staff members are unhappy about making the change, one option is to stop paying their travel expenses until they do. Although such a move may appear draconian, if an accident takes place and insurance has not been checked, or expenses are still being paid, the HSE could bring the Corporate Manslaughter and Corporate Homicide Act 2007 into play. This legislation includes personal liability for senior directors.

Such a scenario could, of course, have very serious consequences and, for the sake of a few simple checks, it is simply not worth it. 

 Adam Bamford

Adam Bamford is Expedite services manager at Selenity. He took on the role in December 2015 having previously been part of the company’s commercial business development team, which launched the outsourced expenses service for large businesses earlier that year.