Are you covered for business travel on their car insurance?

Are you covered for business travel on their car insurance?

For many businesses, car insurance gets ignored. It can seem like a cheaper and more sensible option to allow their employees to use their own vehicles for business travel rather than the alternative of buying or hiring company cars – especially during a struggling economy.

But many firms fail to realise that they are subject to the same health and safety rules for this so-called ‘grey fleet’ as they are running and managing their own fleet of vehicles and they could find themselves in hot water if they’re not taking necessary steps to ensure these vehicles are safe or roadworthy – or fully insured.

Grey fleet drivers must have insurance which permits them to travel on business, otherwise the insurance company will not pay out in the event of an accident. Businesses and fleet managers have a duty of care under the Health and Safety at Work Act 1974 to ensure their drivers have the correct form of cover.

David Hudson, managing director of leading Manchester-based commercial insurance brokers Buckland Harvester, said: “Many employees fail to notify their insurance company that they are using their vehicles for business travel which is a serious situation, especially in the event of an accident where they will not be covered.

Businesses often opt for a ‘grey fleet’ system because it requires less administration and can be cheaper however this method still requires careful management as firms are subject to the same health and safety rules.

“Businesses need to develop an arrangement in which they can ensure all grey fleet vehicles are properly serviced, maintained and insured for business use – preferably before the vehicle is allowed to be used on company business.”

The Government recommends that businesses request the following information from any employee intending to use their private vehicle for business:

  • A copy of a valid insurance certificate including cover for business use
  • A copy of the driver’s licence
  • A signed declaration that the vehicle is fully serviced and maintained to the manufacturer’s standards
  • A valid MOT certificate for vehicles more than three years old

These documents should be held for a maximum period of 12 months before replacements are requested. If an employee regularly travels above 80 miles a day, it could be cheaper to use a daily rental car.

For more help and advice on car and fleet insurance contact Buckland Harvester via