Covering Customer's Vehicles

Customer's Vehicles is an area that many businesses still don't understand what risks are involved, even with simple areas such as leaving a customers vehicle on a street before you take them into your unit.

Firstly let's look at vehicles that you have in your custody or control. Take the ones that your customer delivers to you. You or they choose to leave the vehicle at the front of your premises before you drive it inside, this is assuming of course that your premises have the facility to accept a vehicle.

Note the use f the word in, not "at" or "on" as this could be crucial to correct cover. If your insurance policy covers you for customer's vehicles you need to know the limitations of the cover, or more to the point where cover ceases. It's unlikely that your premises business insurance is going to cover vehicles which are located on the road or adjacent to or in the vicinity of the business premises. It is worth noting also at this point that if you have a compound attaching to the premises with no public access then cover for loss damage and liability should be covered, but you must check this with your insurance advisor.

The Road Traffic Act (RTA) can be quite complex and issues relating to it are down to the interpretation of the courts, if you Google the interpretation of the Road Traffic Act you might assume it to be slightly contradictory. As far as this article is concerned, and to be on the safe side, if the public has access to the area where the vehicle is parked/located then RTA will apply. For the sake of this article we will not deviate from this.

Where RTA applies, adequate insurance needs to be in place, which means when you are in charge of a customers vehicle on the public highway. The Road Traffiic Act (1930 and subsequent alterations) makes it compulsary for all motor vehicles used on the public highways to be insured.

Let's take this one step further, the vehicle is parked in front of your unit, but you have to drive that vehicle inside, and that means that RTA applies! That means you need to be insured to drive that vehicle, because the front of your unit will almost certainly be termed as public highway. Don't naturally assume that your customers policy will cover you either, the chances are it won't!

The most obvious one of course is to believe that you can drive your customer's vehicles on your own policy (under the driving of other vehicles section on your car policy). Think again.

Firstly the extension usually found on private car policies is "Third Party Only" cover at best and is intended to cover you in the case of an emergency, not for everyday use. The following is taken from a typical private car policy and is greatly misunderstood by most: The insured (that's you) may also drive for Third Party cover a private motor car not belonging to him/her and not hired to him/her under a hire purchase agreement in respect of which no insurance is afforded to him/her under any other insurance applying to such car.

So that seriously narrows your choice of cover - that is of course if you have the extension of cover on your certificates in the first place, and not everyone does.

Then of course the chances are you will be driving a customers "van" for business use, hardly the type of cover your insurer would be giving you free of charge. At this point you might be forgiven for thinking that it doesn't really matter anyway, the chances are it won't happen to you, but it all too often will. Believe me, if you saw the types of claims we receive you'd begin to think that nothing is impossible.

So you have moved on, guilt (or sense) has dictated that it might be a good idea to get some proper cover. Enter stage left the motor trade policy, which will fix all your problems and thus you will be able to drive anything, from anyone, and be covered anywhere, right? Wrong!

Let's look at this type of policy. Motor Trade Road Risks insurance, yes they serve a purpose, but let's look at these in some detail. The things to find out here are: just what can you drive (some types of vehicles are excluded) and the indemnity limit (the most the insurer will pay in the event of a loss). If you are working on newer vehicles, check out what limit the insurer is providing. Hopefully you shouldn't have to search for this as you should have selected the amount yourself when you took out the policy.

The, depending on the insurer, these policies when in isolation usually exclude all cover other than third party (damage to third party, property damage or injury) within a quarter mile of the business premises or in some cases "the vicinity". That means that Accidental damage, Fire, Theft and Windscreen are not covered at your business premises, nor when parked on or adjacent to them, so this is not the type of cover that needs to be in place. Of course you have got part of the way there as it will satisfy the RTA requirements for driving vehicles in and out of your unit, but that's about it (we can give you our opinion on your policy and we will tell you immediately what the extent of cover is, if you send it to us).

Don't assume because it's a commercial vehicle that the cover is "any driver" and even if it is, does it include cover whilst in your possession? Even if it does, the insurer of the vehicle may almost certainly subrogate (they will try to recover costs and expenses from the responsible party - that's you) any claim back to you as it was in your custody or control at the time of the loss.

Same as commercial vehicle really, whatever happens here do you really want to be responsible for any loss of vehicle, consider theft, happy to be paying for your customer's vehicle? No, thought not, and you probably wouldn't be able to afford to pay an injury claim yourself either.

What do you do to fix it? Firstly consult your policy and your certificate of motor insurance, or make sure you ascertain exactly what your customer's cover is if they insist they are covered, either way, get it in writing!

Make sure you have insurance fit for purpose. Contact us for more information.