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  • Fulfil your duty of care and make sure your grey fleet are insured

    In business the term ‘grey fleet’ describes any of those vehicles used for business travel that aren’t owned by the company, but owned or rented by the employee. Whilst many businesses assume their grey fleet are insured for business use based on the employee’s word, without actually checking you can never really be sure. In many cases drivers don’t fully understand exactly what insurance they need and their insurance doesn’t cover them properly. Businesses also tend to focus on their fleet insurance for company owned or leased cars, rather than being fully aware of their grey fleet.

    One third of UK business drivers are said to be driving uninsured on the roads for business purposes, and a disaster on the road could run into thousands of pounds of damages and risk the success of any reliant business.

    For employees it requires an education into exactly what cover is required for their job and also understanding that although insurers do charge higher rates for ‘business use’ as a grey fleet driver they can also receive compensation through Approved Mileage Allowance Payments, which is rated to include insurance costs.

    Many people do not know that the following types of cover are available for personal car insurance:

    • Social, domestic and pleasure, excluding commuting
    • Social domestic and pleasure, including commuting
    • Class one business use
    • Class two business use
    • Class three business use

    Some employees even think that ‘including commuting’ is enough, and without explanation of the three levels of business use it can be easy to understand how in many cases up to 20% of grey fleet drivers are not correctly insured.

    Often a business driver will be expected to attend a meeting and choose to drive their own car and claim back fuel expenses without thinking that they need to be insured for more than commuting. The employee may not consider insurance especially when such business trips are few and far between and do not seem worthy of the effort. This raises huge concerns for the ‘duty of care’ that businesses are legally bound by towards the employee, having the correct cover in place is not down to the grey fleet driver but is the company’s responsibility.

    In many cases perhaps even the line manager responsible for the employee does not understand the full implications and level of cover that is required. It is a matter of education. If an employee drives on business and does not hold the correct insurance there will be costly implications for the business if they are stopped or involved in an accident. Insurance checks should be carried out quarterly or annually for all grey fleet drivers, depending on staff volumes and turnover.

    Some insurance certificates themselves are very vague whereas others will specifically state that they do not include business use (grey fleet), which can lead employees to think they are covered. It is important to check the schedule or policy booklet for all of the details as, for example, if an ‘any driver’ policy had an age limit on it this would not be mentioned on the certificate. In general the certificate will state what is covered, rather than what is not covered.

    Grey fleet – business use levels of insurance

    Class one

    This covers the employee for driving to different sites away from their normal place of work. It may also cover a spouse for business use on the same car. However it will exclude commercial use such as delivery and selling of goods.

    Class two

    This cover is required if you wish to insure an additional named driver for business use, but excludes commercial use and selling.  It is less common as there are not so many instances of people wishing to cover their colleagues to drive their car for business.

    Class three

    This cover is required for business use as both of the above, but also covers the transportation of light goods. It is necessary for circumstances such as for example a collect plus driver using their own vehicle to deliver or collect goods, door-to-door sales, or visiting clients with physical goods to sell.

    Tackle grey fleet issues by extending your fleet insurance

    One way to tackle the increasing problem of grey fleet insurance is to extend your fleet insurance to include grey fleet drivers. However, some insurers may impose restrictions on the number of miles covered and frequency of journey. It is important to check with a specialist fleet insurance broker to understand the full intricacies of what is covered on your policy. They will be able to provide the best advice on what should be included for your business and search for the most efficient policy to meet your needs at the best price.

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