Page 1 of 3 123 LastLast
Results 1 to 10 of 23

Thread: BE CAREFUL - THIS CAN COST YOU

  1. #1
    Email problem Phil Cooper's Avatar
    Join Date
    Nov 2010
    Location
    Midrand
    Posts
    644
    Thanks
    0
    Thanked 170 Times in 118 Posts

    BE CAREFUL - THIS CAN COST YOU

    Many businesses, especially smaller ones with sketchy admin, run frightening risks daily owing to unsuspected gaps in their insurance portfolios. Motor vehicles, for instance, are such a familiar part of our lives and businesses, we scarcely spare a thought for the large, powerful, dynamic machines that they are, even “old”, “small”, “slow” ones! They cause horrifying injury and damage with unexpected legal consequences.

    Example:

    An Admin Assistant / Secretary would not ordinarily have to do anything for the firm outside of the office. But what if the banking is late and Jenny (let’s call her) is leaving early? It’s, “Oh, Jen, do us a favour and deposit this on your way home?” (Same applies to Post Office, L+W, Home Affairs, stationery supplier …!) Now, what is Jenny driving? Her own car, no doubt. But, is it insured? Oh, yes – great (!) But, wait, only for Private Use (eish!!)

    Jenny is effectively without cover from the moment she agrees to “just do you a favour”, and so is the firm. Her car may be a run-down mom’s taxi, but, if there’s an accident, the other party’s vehicle / property could be very valuable and they may blame her for the prang. And when her policy declines to pay, recourse against your company is a logical step to follow.

    What to do?

    For a modest premium (depending on how many employees you have) you can add an extension to your Motor section, namely CONTINGENT LIABILITY, to guard against exactly this. It covers the firm against any indirect (ie., “contingent”) liabilities it could pick up by being legally responsible for the actions of its servants going about its business in cars other than its (the firm’s) own.

    Hint 1:

    Avoid like the plague the temptation to have employees go outside their “course and scope” to run errands for you, esp.in vehicles. (Has other implications too – eg., Personal Accident; OHSA.)

    Hint 2:
    If they must go, rather have them use a company car, not theirs.

    Hint 3:
    Examine / Copy / Certify the Current Drivers’ Licences of All Staff and keep these on their staff files.

  2. Thank given for this post:

    Martinco (30-Jul-12), Singhms (27-Jul-12), wynn (27-Jul-12)

  3. #2
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,979
    Thanks
    3,055
    Thanked 2,462 Times in 2,067 Posts
    Blog Entries
    12


    If Jenny is on a nominated driver policy, could the insurance turn the claim down because she happened to be running mail instead of her and her neighbour's kids?

    And what about sales staff on a vehicle allowance? Could the company be held responsible if the person happened to have "normal" personal vehicle insurance?
    The trouble with opportunity is it normally comes dressed up as work.

  4. #3
    Email problem Phil Cooper's Avatar
    Join Date
    Nov 2010
    Location
    Midrand
    Posts
    644
    Thanks
    0
    Thanked 170 Times in 118 Posts
    Dave

    What counts is for what purpose the vehicle is being used.

    If it is "Private and domestic" and it is being used for business purposes there is NO cover, irrespective as to whom is driving.

    As to the second question - yes, the Company could be held responsible. They must take steps to ensure car is insured for Business use...

  5. #4
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,979
    Thanks
    3,055
    Thanked 2,462 Times in 2,067 Posts
    Blog Entries
    12
    Quote Originally Posted by Phil Cooper View Post
    They must take steps to ensure car is insured for Business use...
    But we did - we're paying a vehicle allowance. What did you think that was for, to get a car for your personal use only?
    The trouble with opportunity is it normally comes dressed up as work.

  6. #5
    Gold Member
    Join Date
    Jun 2010
    Location
    Johannesburg
    Posts
    832
    Thanks
    180
    Thanked 176 Times in 145 Posts
    Quote Originally Posted by Dave A View Post
    But we did - we're paying a vehicle allowance. What did you think that was for, to get a car for your personal use only?
    I guess we now have to check the employee's insurance to make sure they are covered for business use when giving them the allowance. It amazing how much responsability one takes on as an employer.

  7. #6
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,979
    Thanks
    3,055
    Thanked 2,462 Times in 2,067 Posts
    Blog Entries
    12
    I accept Phil's opinion as an insurance broker - the insurance company might reject the claim.

    I'd be happier with a legal precedent though when it comes to the employer being held responsible, especially in a vehicle allowance situation.
    The trouble with opportunity is it normally comes dressed up as work.

  8. #7
    Diamond Member Blurock's Avatar
    Join Date
    May 2010
    Location
    Durban
    Posts
    3,437
    Thanks
    660
    Thanked 765 Times in 630 Posts
    Blog Entries
    1
    What exactly is the definition of business use? What is the difference between me driving to my sole prop business and collecting my mail and newspaper on the way and private use? (doing about 1000 - 1500 km per month)

    I see Business use as a risk where it involves high mileage and possibly transporting goods and/or customers/employees. Can an insurance company be so petty to refute a claim because I used my private car to visit a client?
    Excellence is not a skill; its an attitude...

  9. #8
    Email problem Phil Cooper's Avatar
    Join Date
    Nov 2010
    Location
    Midrand
    Posts
    644
    Thanks
    0
    Thanked 170 Times in 118 Posts
    Regretfully, they can.

    ANY use in the course of your business - be it getting the mail, or going to the bank, would be regarded as Business use...

  10. #9
    Full Member
    Join Date
    Apr 2012
    Location
    KZN
    Posts
    36
    Thanks
    4
    Thanked 4 Times in 4 Posts
    Disclose the type of use to your insurer. This avoids the obstacle. When I disclosed (on a recording that they kept) the use of my vehicle for occassional client visits and transport of small items (that could fit in boot) approx 3x per month, I got billed a whole R7 extra. Outscum wanted to nearly double my rate when declared for business. There is a median and you just need to have it on record. Some companies don't charge extra, as long as prperly declared and that it is very occassional. Speak to your insurer properly.

  11. #10
    Email problem Phil Cooper's Avatar
    Join Date
    Nov 2010
    Location
    Midrand
    Posts
    644
    Thanks
    0
    Thanked 170 Times in 118 Posts
    Well said, kleva - that is the whole issue!

    Trying to cover up results like the below report - butI still think OutSurance are in the wrong.

    Categorically!


    OutSurance3.pdf
    Last edited by Dave A; 13-Aug-12 at 08:22 PM. Reason: removed duplicate attachment

Page 1 of 3 123 LastLast

Similar Threads

  1. cost of living
    By murdock in forum General Chat Forum
    Replies: 39
    Last Post: 03-Dec-15, 11:54 AM
  2. [Question] Cost of sales
    By Singhms in forum Entrepreneurship and Business Management Forum
    Replies: 1
    Last Post: 14-Sep-11, 05:33 AM
  3. Possible SEO services scam from Omega Services - be careful
    By SilverNodashi in forum Scam Alert Forum
    Replies: 3
    Last Post: 29-Jan-11, 11:43 AM
  4. The cost of government
    By Dave A in forum Business Finance Forum
    Replies: 24
    Last Post: 09-Sep-09, 11:39 AM
  5. Low- cost housing???
    By missD in forum General Business Forum
    Replies: 1
    Last Post: 31-Mar-09, 08:07 AM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •