1 in 5 business drivers have the wrong car insurance

1 in 5 business drivers have the wrong car insurance

By Adam Bamford, Expedite Services Director
16 September 2019

There are an estimated 14 million grey fleet vehicles on UK roads. Of those, 11.8 million are associated with the private sector and 2.2 million from the public sector, according to statistics from the British Vehicle Rental and Leasing Association (BVRLA). 

Regardless of the reason for the journey – whether your employee is driving to a customer meeting half way across the country or driving to the shop to pick up milk during the working day – they must have, at the very minimum, Class 1 business insurance to cover their journey. Our experience at Selenity is that not all employees have the right cover.

As part of our Expenses management solution, we offer an enhanced duty of care service allowing our customers to carry out automatic checks of driver and vehicle data using data sourced from the DVLA and DVSA. At this moment there are no facilities to automatically check insurances and the only organisations that can access the Motor Insurance Database (MIB) are the Police and insurance providers. 

To help organisations efficiently manage this, we provide an outsourced insurance validation service, which checks employee insurance records within their expenses system. In helping our customers we’ve discovered a disturbing trend - we’ve found that 21 percent of drivers are failing our insurance checks and may not be eligible to drive for work purposes. That's 1 in 5!

Specifically, 12 percent don’t have business insurance so it is illegal for them to make work-related journeys of any kind. Worryingly, nine percent of drivers that failed our duty of care insurance checks had out of date insurance policies; they’re not insured to drive at all.

It’s a shocking set of statistics that points to an issue that business owners shouldn’t be ignoring – their employees are breaking the law, either inadvertently or potentially on purpose. In one instance, we discovered that an employee didn’t have a driving licence, yet they were regularly making work-related journeys.

The implications for the employee are fairly obvious; roadside fine of £300 and six penalty points. If the case goes to court then there is an unlimited fine, driving disqualification and the vehicle seized and destroyed. However, employers too, can be on the hook for fines and potentially worse, if it’s deemed they haven’t carried out the necessary checks of driving licences, MOT certificates, and insurance documents.

It’s a legal obligation under the Health and Safety at Work Act for employers to check at least once a year that their employees are safe and legally allowed to drive for work purposes. If your employee is in an accident, the Police and the Health and Safety Executive (HSE) may check whether the correct policies and procedures are in place for duty of care within your company and will take punitive action if they aren’t.

These punitive measures could be exacerbated if the HSE finds that businesses are ‘looking the other way’ and ignoring bad driving habits, or if they aren’t proactive in promoting safe driving practices to employees. 

How can you enforce duty of care effectively?

My advice is simple; you need to put processes in place to demonstrate to the HSE that you are meeting your duty of care obligations. It’s very easy for companies to do these checks themselves – MOT certificates, driving licences, and insurance documents should be checked at least once per year for every single driver. For the higher risk drivers – those with penalty points – more regular checks would be advised. And keep copies of these documents.

Unfortunately, you can’t stop risky drivers from speeding and you certainly can’t prevent accidents just by checking documents, but it does demonstrate that you do have your employees’ wellbeing in mind. Updating company handbooks to include safe driving advice and guidance will also demonstrate to the HSE you take your duty of care responsibilities seriously.

There are a few challenges in checking documents; it’s time consuming and takes up storage space, either electronically or physically for paper copies. And, most challenging of all, sometimes it can be incredibly difficult to determine whether an employee actually has the right insurance cover.

At Selenity, we’ve seen documents from 26 different insurance providers and each one is worded differently. Some clearly state if the policy holder has business insurance and some don’t make it clear at all. It’s easy to see why some employees think they do have the right cover when they don’t.

There is potential for your employees to push back on having to change their insurance, not least because their premium is likely to go up. Some of our customers cover the extra cost to include business cover and some don’t, it’s down to the individual company.

If they do push back on the cover, my advice is to withhold paying out any travel expenses until the employee is covered. The reason – if there’s an accident with your employee and you haven’t checked insurance cover, or you still pay for expenses then the HSE may well treat the accident under the corporate manslaughter act, which includes personal liability for senior directors.

That is potentially very serious for employers with incredibly serious consequences for what are very simple checks.

If you want more information on our insurance validation service or enhanced duty of care, get in touch >>


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