"Well the driver thought the lorry would go under the bridge..."
What is Motor Fleet Insurance?
Motor fleet is simply the grouping of a number of vehicles together under one policy document, with a single renewal date for administrative convenience. The basic underwriting criteria is similar to that for motor insurance generally the premium charged will vary with the types of vehicles and the drivers. The Business Insurance Bureau does not provide domestic motor insurance, but does arrange motor fleet covers for clients company vehicles.
Insurers may also wish to take into account the code of where the vehicle will be stored overnight. Motor Fleet policies are generally available for groups of five vehicles and above and can incorporate both car and commercial vehicles.
A Motor Fleet policy is rewarded with a ‘fleet discount’ based on an annual claims experience – with a small number of vehicles and single large claim all drivers are punished.
It is sometimes beneficial with a small number of vehicles to have a multi vehicle motor policy that is ‘no claims bonus’ based. Another complication of recent times is that the taxation system has enveighed against company cars as a perk, and it is vital that ownership and use for company business issues are properly recorded at the start.
The Road Traffic Act
The road traffic act was first introduced in the 1930’s and required that anyone driving a motor vehicle had to have insurance covering third party liability. Over the years the act has been amended to reflect modern driving habits and culture but the basic principles remain the same. It is illegal to drive a motor vehicle on costs and other costs incurred with the insurers consent a road or public place without the relevant insurance in place.
The law also makes provisions for payments to third parties even when the Insured is not complying with conditions of the policy. However, once a claim is settled with the third party the insurer can sue for recovery of their outlays.
1st EC Motor Directive
When the UK joined the EC it became a signatory of the Directive and is designed to aid international travel between member countries. It is agreed that the motor insurance is automatically extended to cover the minimum insurance requirements whilst the vehicle is being driven in that country.
Again, the directive has been updated (now the 5th EU Motor Directive) and amended regularly to ensure uniform levels of cover and that claims are dealt with in a timely efficient manner.
The Rehabilition of Offenders Act 1974
The principle effect of this legislation is to prevent criminal offences from being considered in assessment against an individual for an indefinite period of time. For insurance purposes the important periods for driving offences are:
Five years in the event of a Fine
Four years in the event of an endorsement (except drink driving offences)
In the event of a driving suspension the rehabilitation ends when the suspension ends, but license endorsements continue as above
If the offence is more serious (i.e. drink driving) or you are unsure if you need to declare a conviction please speak to your advisor
Motor Insurance Databse
The Motor Insurance Database was originally established to capture details of individually insured vehicles but has subsequently been extended to include fleet risks and fleet operators are responsible for ensuring their details are logged and up to date. Current regulations state that all changes have to be updated within seven days of the change taking place.
All claims must be notified to the insurer as soon as possible and all relevant information provided. In the event of an accident, no admission of liability is to be made to any party.
The insured is required to take reasonable care of the vehicle to safeguard it from loss and to maintain it in a roadworthy condition.
Although there are exceptions to individual parts of the policy; we have listed those applying to the whole policy;
Liability is excluded if the vehicle is driven by a person not covered by the policy.
Liability is excluded if the vehicle is being used for a purpose other than that covered by the policy.
Anyone driving the vehicles must be in possession of a valid driving licence and in compliance with its restrictions.
To ensure that all drivers have valid driving licenses, Insurers are notified of relevant criminal convictions, all vehicles are maintained and in good condition. The Motor Insurance Database is updated in the event of any changes to your vehicles, In the event of an accident, never admit liability.
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Frequently Asked Questions
In the UK a fleet insruance policy covers a minimium of three vehicles. We are unable to provide motor cover for less than three vehicles. There are no restrictions to the type of business which can have a fleet policy.
Any vehicle which is owned by & registered to the company. This will also include hired-in vehicles and loan/courtesy car vehicles. Vehicles leased under a lease agreement to the company or one of its directors can also be added.
No. Some fleet policies offer added value benefits and cover extensions that may be a useful addition to your cover. Others may offer assistance with risk management, optional Breakdown Cover or driver training as part of the package. There are different levels of cover options available and others may be a fleet declaration type policy. As experts in Motor Fleet insurance we can help you find the best policy to suit your requirements.
Most fleet policies are usually arranged on an Any Authorised Driver basis which means that anyone can drive with the permission of the company/directors.
However there are discounts available if you wish to restrict driving either to Named Drivers only or Any Driver but with a driver age restriction (e.g. Any Driver over 30).
Younger drivers under 25, if included, will usually have an increased excess applicable when they are driving.
Drivers who have serious convictions on their driving licence MUST be referred to insurers before allowing them to drive.
These would include any conviction code that begins with the following letters: AC, BA, DD, DR, IN, MS, NE, TT, UT & XX. We recommend that all fleet operators carry out regular licence audits and take photocopies of all drivers’ licences at least once a year.
No, you can only drive vehicles that are noted on the policy. Fleet policies do not cover driving other cars on a third party basis.
One benefit of a motor fleet policy is that different types of vehicles can all be placed on the same policy. Construction and agricultural plant such as tractors, JCB’s and excavators, and special types of vehicles – fork lift trucks, trailers, horseboxes and even road sweepers can all be accommodated. Policies can also be extended to include the Tool of Trade risk (sometimes known as Third Party Working Risk).
It is important to consider where your Plant will be used as the current definition of a “Road” is very wide and will include most places where the public have access including car parks, etc.
Director’s own vehicles can usually be included in a company fleet as long as they are registered to the directors personally. A special motor certificate will need to be issued for these vehicles showing the registered owner’s name so they will need to be declared to us.
Driver information required will routinely be: Name, Date of Birth, Length of Driving Experience, Motoring Convictions and Claims Experience
Vehicle Information required will routinely be: Type, Make and Model, Engine Capacity/Gross Vehicle Weight, Registration Number, Value and Age
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A Fair Presentation of the Risk
At the heart of insurance contracts is an obvious truth: you have an enormous advantage over the insurer. You know all about your business, its history, processes, people and management, but the insurer knows nothing – other than what you tell them.
You have a statutory duty to make a fair presentation of the risk. You must tell the insurer:
• Every material circumstance which you know or ought to know and/or
• Sufficient information that would cause the insurer to make further enquiries, if neccessary, to review those material circumstances
• You are deemed to have the knowledge of the company’s senior management.
• You are deemed to have the knowledge of the person arranging the insurance (who is deemed to be a senior manager under statute).
• Anything that can be discovered by a reasonable search.
A failure to make a fair presentation of the risk gives the insurer various remedies, depending upon the nature of the failure, from avoiding the contract and not paying claims to modifying the basis of settlement.
Examples of Misrepresentation
It is often easier to demonstrate the consequences of risk presentation failure by example rather than theory. Here are some real life examples of typically forgotten or unrevealed material facts which later caused huge problems and repudiated claims:
A reprocessing plant did not reveal a series of small fires during their insurance year.
Following repeated false alarms, a retailer didn’t reveal that Police Response had been withdrawn.
A restaurant omitted to reveal repeated minor floods from an upstairs nightclub.
A construction company didn’t reveal potential employee claims recorded in their accident book.
A company failed to reveal written warnings to an employee over repeated dangerous driving.
A company failed to reveal that it had been ‘struck off’ by Companies House and was trading as a new legal entity under a different designation.
Compiling the Risk Presentation: an ongoing process
The compilation of risk information for presentation to an insurer might be thought to be simply contained in a proposal or risk presentation form, however, such forms are not exhaustive and cannot take account of circumstances which change beyond their
compilation. Moreover, merely referring insurers to your website or dumping data is not making a fair presentation of the risk. ’Fairness’ is a subjective test but it would certainly involve simplicity, clarity and relevant selection.
Ongoing communication is vital, because the duty to disclose material circumstances is ongoing throughout the insurance year and at renewal of the insurances.
It is not possible to overstate the importance of researched, adequate risk presentation – there have been countless legal disputes, repudiated claims, ruined businesses and lives arising from the simple failure to reveal all the facts to an insurer. A failure to present risk adequately is a bigger risk than the risk you present.
It doesn’t matter that the failure is innocent, something overlooked, forgotten or discounted as unimportant – it might be important to the insurer, in which case it must be revealed.
Should there be anything not yet disclosed, or that you are unsure would influence your insurers about this insurance tell your broker/insurer immediately.
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Who are The Business Insurance Bureau?
The Business Insurance Bureau is a niche specialist underwriter and commercial insurance broker, defying conventional categorisation, comprising of a small number of gifted individuals forming a collective intellectual giant.
We have developed our own unique range of quality insurance products, which has given the business a competitive advantage in several areas. Being in control of the entire process, from enquiry to policy issue, has allowed our business to deliver service levels hitherto unimaginable in this sector, or indeed for a business of its physical size.
We insure a spectacularly diverse clientele, similarly exclusive and excellent in their field, who rely on The Business Insurance Bureau to protect their assets, minimise their liabilities and secure their future.