16/06/2017
‘Grey fleet’ is a term given to those drivers who use their own vehicles to make business journeys. It is imperative that employers understand the issues relating to this subject, particularly with regard to insurance.
The facts about Grey fleets. In black and white.
Any employee who chooses to use their own car to make a business journey should be considered a grey fleet driver. This can range from a member of staff who only makes the occasional work trip to those who have taken a cash option to purchase their own car, rather than a company car. In each case, the employer is making the decision to use the employee’s vehicle as a company vehicle and therefore, it must be treated as such.
In order to cover your obligations and minimise your risk, the easiest thing you can do is put a suitable driver policy in place and make sure a driver handbook available to all employees. Within the policy, you should clearly outline the driver’s personal responsibilities and why these are important, both for them, and you as their employer. Then subsequently, you, as the employer, will need to complete a series of simple driver checks.
Grey driver insurance is another potentially confusing subject. Many employees do not even realise that they require business insurance. So it’s important that you highlights this to them and insist that they take out suitable cover.
Remember, as an employer, you have effectively commandeered the employee’s car for use as a company vehicle and therefore, take on the associated responsibilities.
Standard private motor policy for social, domestic and pleasure use will generally only cover employees to travel between their home and one main place of business. If your employee is on the road all the time, they are obviously going to require business motor insurance. However, if you ask an employee to make a detour via a client or a supplier, or even to simply run an errand (such as going to the bank) then this also becomes a business journey for which they may not be covered under their own insurance.
If the employee doesn’t have business motor insurance, you could be deemed to be asking that employee to break the law, i.e. to drive without proper insurance.
Furthermore, it is estimated that 20% of those employees that do have business insurance actually have the wrong type and, therefore, aren’t covered correctly.
Drivers also need to understand the difference between business use and commuting, as well as the type of business cover they need. This should be explained to them in the ‘driving at work’ policy.
Fleet insurance can be extended to include grey fleet drivers. However, this is usually defined as ‘occasional business use’ and there may be restrictions around how many miles each driver can do (typically 1,000 a year), how many drivers can be covered and the frequency of journeys.
Insisting that employees use a hire car rather than their own car for business journeys can still create problems with insurance.
“Make sure if an employee books a hire car it’s hired to the company and not the individual,” warns Steve Stock, senior motor underwriter at Zurich Global Corporate. “If it’s hired to the individual it’s retail insurance, not business insurance.”
So, in summary, it’s up to you to sort out the right business insurance for grey drivers. If one of your employees drives on business without appropriate insurance, there may be implications for you if that member of staff is stopped by the police or involved in an accident.
Now that is enough to give you grey hairs.
