Grey Fleet Business Cover Options
There are basically three practical options that we can provide;
1. We can operate a formal document checking service under which we check and record all insurance arrangements put in place by the driver.
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2. We can make available the fleet insurance to drivers who can buy into the fleet arrangement and pay either annually or monthly through salary deduction.
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3. We can offer a 'business use only' policy, completely separate from the fleet policy, that will supplement the drivers own private insurance arrangement.
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Action
If you wish to take advantage of either of these options please contact us on 01206 257203.
If you wish to obtain a quote for option 3 we will require a report showing the number of employees claiming business mileage and the number of miles claimed. We can recommend a standard ESR report if required.
Background Information | Cover Options
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Under option 1 - We will take all reasonable care and use our best endeavour to ensure that private vehicles used at work are correctly insured. Under the Knowles arrangement we have a contingent liability endorsement which provides cover in circumstances where all reasonable care has been taken.
Under option 2 - There is a 100% certainty that adequate cover is provided for any vehicle and any driver. In addition the greater number of vehicles using the policy will generally help reduce the premium going forward. In addition the drivers would benefit for paying their insurance on a monthly basis with no additional interest charges. However, this scheme must not be optional; if it is then only those drivers that will benefit from a lower premium will join and these are the drivers that may be higher risk.
When we calculate the number of drivers on the scheme at the start of the year the Trust will pay the full premium for those vehicles. Additional vehicles that join during the year will be charged at 50% of the premium and 50% of the premium will be returned if the number of vehicle go down. Therefore drivers leaving the scheme during the year will have their insurance taken over by a new employee with no cost to the Trust.
Under option 3 - There is also a guaranteed 100% cover because the type of cover reflects the cover provided under the fleet policy. The benefit here is that employees will be free to take out whatever cover they wish for private use e.g. third party only and will not have to fund the higher premium for business cover. It will not be necessary for anyone to check insurance details as the business cover will always prevail.
The premium is charged on a mileage basis and the Trust will only pay for business journeys in arrears. The driver will pay for this cover via a reduced mileage allowance based on the public transport rate. For example if the insurance and registration scheme charge is 3p per mile the mileage allowance will be 20p rather than 23p.
We have based our recommendation on the Automobile Association (AA) motoring costs which are used as a standard by the Inland Revenue and for Whitley (now Agenda for Change). The current AA motoring costs for a car with a purchase price between £13,000.00 and £20,000.00 @ 15,000 miles show a provision for insurance of 3.8p. Therefore if the driver no longer provides insurance the allowance can be reduced accordingly. The added benefit is that the scheme will provide an incentive to reduce business mileage and therefore the cost.
