If your business provides temporary drivers or contractors to clients, then you need to ensure you’re protected against the possibility of personal negligence claims. Fortunately, a solution is available in the form of drivers negligence insurance.
Below, we’ve set out everything you need to know:
What is drivers negligence insurance?
Drivers’ negligence insurance provides cover for vehicle damage that happens when your temporary driver is at the wheel. It covers small bumps and scrapes to your client’s vehicle that cost less than your client’s motor insurance excess. It is not a replacement for motor insurance.
For larger amounts of damage, or if the vehicle is written off, drivers negligence insurance can cover the excess that your client must pay under their motor fleet policy.
How does drivers negligence insurance work in practice?
Imagine two scenarios in which you send a driver out to drive a heavy goods vehicle (HGV) for ABC Logistics Ltd:
In the first scenario, your driver scratches the side of the trailer when reversing out of the yard, causing damage to the trailer paintwork, and bending a gate post in the yard. The cost of repairing the scratch to the vehicle will be £2,500, which is below the excess on ABC Logistics’ motor fleet policy.
Outcome: ABC Logistics will claim for the £2,500 to repair the scratch under your drivers negligence insurance. The gate post wouldn’t be covered under the drivers negligence policy as the insurance only provides cover for the vehicle.
In the second scenario, your driver loses control of the HGV on ice and ends up in a ditch, twisting the trailer out of shape and damaging the cab side. The driver is uninjured. The trailer is written off (value £20,000) and the cab requires body work and respray at a cost of £10,000.
Outcome: as this is a Road Traffic Accident, the motor insurers for ABC Logistics will settle the claim for the £30,000, but ABC Logistics have an excess under their motor fleet policy of £10,000 per claim. ABC Logistics will claim for their £10,000 excess under your drivers negligence insurance.
What else do I need to consider?
If you do decide to take out drivers negligence insurance, it’s important to ensure the policy is suitable for your needs. Here are some key points to look out for:
Level of cover
Your drivers negligence cover will have two limits:
A limit of any one claim – the maximum your insurance will pay out for any one claim. Typically, clients will ask this to be £10,000.
A limit during any one period of insurance (or aggregate limit). Typically this is £50,000 – the maximum your insurers will pay out during your 12 months of cover.
Excess
The excess level you’re liable for will depend on your policy wording. In Lockton’s policy, the excess you will need to pay varies according to the driving experience of the temporary driver that has caused the damage:
If the license for the driven vehicle is held between 6 months and 1 year, the excess you will need to pay is £1,000.
If the license for the driven vehicle is held between 1 year and 2 years, the excess you will need to pay is £750.
If the license for the driven vehicle is held for over 2 years, the excess will be £500.
Other providers of drivers negligence insurance may have variable excesses based on other factors, such as the age of the temporary driver. In such cases, they will outline the ages and relevant excess in their terms.
Basis of cover
There are two versions of drivers negligence cover available to employment businesses:
Claims occurring – most suitable for employment businesses, as it is the most common basis of cover in the insurance market. It will ensure any late reported claims are paid by the insurer covering you at the time of when the incident happened.
Claims made – only cover claims reported to the insurer while their insurance policy is live. Any claims reported to the insurer after the policy has expired will be rejected even if they were the insurer at the time of the accident.
Restrictions
All drivers negligence policies will contain a list of restrictions or exclusions. Businesses should read and understand these before taking out a policy.
Typical restrictions include damage arising from, or relating to:
Convictions – meaning a driver whose license shows certain prior convictions or a specified number of points
Inappropriate activities (racing, pace-making, or speed testing)
Incorrect fuel type of additive
Invalid or missing driving license
Loss of use, depreciation, and wear and tear (unless caused directly by negligence)
Plant and lifting gear
Radio transmitters
Rust and corrosion
Theft of accessories or spare parts
Tyre damage
Vehicle type
Weather events
Wilful damage
Any other matters insured elsewhere
Further information
If you have any questions about drivers negligence insurance, or any other areas of our specialist scheme covers for recruiters, please reach out to a member of our team.
