A Recruiters Guide to Drivers Negligence Insurance

Recruitment InsuranceDrivers Negligence Insurance

Welcome

The aim of this presentation is to provide you with a brief overview of Drivers Negligence insurance covers that are available to recruitment businesses.

Hopefully at the end of this presentation you will have a good understanding of the cover as well as the terms and conditions on the various Drivers Negligence covers available to your business.

If you have any questions, please contact me and I will be happy to help you.

Gary ChambersTechnical Director (Recruitment)PIB Insurance BrokersTelephone No. 0117 926 9937Email [email protected]

Drivers Negligence Insurance

What does it cover?This cover is specifically for recruitment agencies that place temporary drivers with hirers, and it provides cover for damage that is caused to the hirers vehicle while it is being used by the temporary driver you have supplied.

It is usual that the hiring company will add a clause to their contract that states that you must have Drivers Negligence cover in place.

There are various policy wordings available for drivers negligence, all provided by specialist insurance providers that have schemes for recruitment businesses. You will not find a high street insurer that will be able to offer Drivers Negligence cover.

It is important that you look for Drivers Negligence cover with the least restrictions and widest cover because the contract you sign with the hirer will expect you to pay claims for any damage caused by your driver and you do not want to be settling claims out of your own profits.

Drivers Negligence Insurance

What does it cover? (continued)Drivers Negligence only covers damage to the vehicle being used by the temporary driver. There is no cover for third party property or injury caused in a Road Traffic Accident.

If your temporary driver is at fault for a collision with another vehicle the main claim will be dealt with by the hirer’s Motor Fleet Insurance, leaving the Drivers Negligence cover to help cover an excess for repairs to the hirers own vehicle.

If your driver is not at fault, then the driver at fault’s motor insurance will pay for all the claims costs and there should beno claim on your Drivers Negligence insurance.

If your driver hits a gate while reversing into a delivery yard causing £2,000 worth of damage to the vehicle and £1,000 to the entry gate, the drivers negligence will pay for the £2,000 (less the excess) for the damage to the vehicle. The repairs to the gate must be paid by the Motor Fleet insurers.

The idea behind the creation of Drivers Negligence insurance was to help maintain good relations between recruiter and hirer by helping cover excess charges under a Motor Fleet policy. It was never there to replace motor insurance.

Drivers Negligence – Cover Elements

Basis of coverThe majority of Drivers Negligence covers available in the market are extensions to the Public Liability section, and some insurers treat drivers negligence as a separate section of cover. Either of these are adequate for your needs.

There is one provider in the market that places Drivers Negligence as an extension to the Professional Indemnity section of cover (a Claims Made Basis of cover). This should be avoided as it is different to every other Driver Negligence cover in the insurance market so taking their cover will leave gaps in your cover if you switch insurer.

Always check to make sure that your cover is on a Claims Occurring Basis, not a Claims Made Basis.

Claims Occurring Basis – The insurer that is on cover on the date the claim occurs will pay the claim.Claims Made Basis – The insurer that is on cover on the date the claim is made will pay the claim.


Claims Occurring vs Claims Made BasisA gap in cover is created when you switch from a Claims Made Basis policy to a Claims Occurring Basis policy.

ExampleYou incept Drivers Negligence on a Claims Made Basis on 1st January 2015 you will be insured for any claims that are reported to your insurer between 1st January 2015 and 31st December 2015.

On 31st December 2015 you decide to move your insurance to another recruitment insurance provider.

On 4th January 2016 you are sent a claim by a hirer for an incident that occurred on 1st November 2015.

Your new insurer will refuse the claim because it occurred before they provided you with cover, and your previous insurer will refuse the claim because they only cover claims that are made while they are on cover.

The best option is to stick with the Claims Occurring Basis as it is the basis that all but one insurer uses.


Limits of indemnityAll drivers negligence policies will show two limits of cover;

Any One Claim limitThis is the maximum amount the insurer will pay for each incident.

Any One Period of Insurance (or Aggregate limit)This is the maximum the insurer will pay out in total during any one period of insurance.

In hirer contracts, they mainly focus on the Any One Claim limit, typically asking for £10,000 per incident.

Any One Period or Aggregate limits are usually set at £30,000 per year. Once you have used up the £30,000 you will have to pay any further claims yourself.

You might be able to get another £30,000 by asking your insurers to reinstate the cover, but prepared to be charged quite a high premium for doing this.


ExcessesThis will be a set amount that you will need to pay for any claims that are made.

Typically the excess is set at £500 so if your driver causes £10,000 worth of damage to a vehicle, that your insurer will pay £9,500 towards the claim and you will need to pay the remaining £500.

In many cases, the recruitment agency passes the excess on to the hirer, so the hirer who puts in the claim is aware that there is a £500 excess on the policy, so the excess will come out of their claim settlement.

You just need to be sure that this is clear between yourselves and the hirer company who is responsible for the excess.


What type of vehicles are covered?Typically most insurers will provide cover on the basis that it is any road licenced vehicle, but some will restrict the cover to HGV only.

Depending on the type of drivers you provide, it is just worth checking to see what vehicles are covered under by the insurer to make sure it suits your requirements

Driver AgesThe majority of Drivers Negligence policies set an age limit for the temporary drivers. Some insurers will limit cover to only drivers over 21 or 25.

Some insurers will allow younger drivers, but the excess you have to pay will be increased depending on the age of the driver that has the accident.

Driver ExperienceInsurers typically state that drivers must hold the relevant driving licence for at least two years. There are insurers that will reduce this to as low as 6 months, but you will pay higher excesses and premiums for this.


Driver ConvictionsA basic Drivers Negligence insurance cover will restrict the allowable convictions on a driver’s licence to speeding and parking convictions only with a maximum of 9 current points.

Some of the wider policy wordings available will extend this to automatically include further types of conviction codes, but all insurers will exclude drivers that have valid convictions for;

• Totting up convictions (TT99)• Disqualified Driver convictions (BA codes)• Careless Driving convictions (CD codes)• Reckless or Dangerous Driving (DD codes)• Drink / Drug convictions (DR and DG codes)

It is always best to try to get the widest cover that accepts the most convictions as it will lead to claims being refused ifyour driver has any of the excluded conviction codes on their licence.


Territorial LimitsWhichever insurer you choose will set geographical limits for your temporary drivers.

Most insurers will only cover temporary drivers whilst they are driving hirers vehicles in the UK, some will cover drivers operating anywhere in the world.

Driver Negligence Agreement FormsYour insurer may insist that for every contract you have to place drivers, you must have a separate Drivers Negligence Agreement form which has been signed by the hirer.

In the event of a claim, if you do not have a signed Drivers Negligence Agreement for with the hirer, your insurers will not settle the claim.

This is a little out dated and some recruitment insurance schemes have dropped the need for a separate form, but you need to check to see if one is needed by your insurers.

Drivers Negligence – Driving Licence Checking

Policy RestrictionsAll Drivers Negligence policy will contain restrictions in terms of the temporary driver’s experience and convictions, so it is important to make sure that you have a process in place to check the driving licence of any temporary driver you place, and ensure that you have a contractual agreement in place with them that ensures that they update you should they gain any additional convictions.

Failure to check a driving licence or being aware of a new conviction could lead to your claims being rejected for that driver.

DVLA Licence CheckingAs you will be aware, on the 8th June 2015 the DVLA ceased issuing paper driving licences and made them redundant.

If you need to check a driving licence you will need to carry out an online check using the new DVLA Shared Driving Licence system.

For full details on how to use the Shared Driving Licence system, you can view this YouTube Video which has been issued by the DVLA - https://youtu.be/59w8xqe7foI

Drivers Negligence – Claims Processes

Making a claimAll insurers will vary on claims procedures, but here are a few generic processes that should help.

Once you have received a notification of an incident from a hirer or driver, you should contact your insurance adviser to notify them of a possible claim. Even if you only know that date and the name of the temporary driver involved, it is always best to notify your insurers immediately.

As soon as you receive the invoice for repairs from the hirer, you will need to send your insurance adviser;1. Any covering correspondence from the hirer2. The invoice 3. The accident report form4. The Drivers Negligence Agreement form (if you insurer insists on one being in place)5. A copy of the contract between yourselves and the hiring company for placing the driver

If your insurer gets all the above documentation, they should be able to process the claim and issue the payment quickly.

Thank You

I hope you have found this information useful, but if you have questions or would like your current insurance reviewed, please contact me and I will be happy to help you.

Gary ChambersTechnical Director (Recruitment)PIB Insurance BrokersTelephone No. 0117 926 9937Email [email protected]

Documents

A Recruiters Guide to Drivers Negligence Insurance