We recently received the following question from a customer:
“One of our employees was driving their own vehicle whilst carrying out a work assignment for us, and caused an accident. Fortunately, there was only material damage to both vehicles. However, our employee’s no-claims bonus increased, even though we took out a Comprehensive Business Assignment insurance policy. Is this normal?”
Before we give you the answer to this question, let’s run through the facts.
A Comprehensive Business Assignment Insurance policy is an extra layer of coverage in case of damages to vehicles caused by an employee whilst travelling in their own vehicle at the request of the employer. This implies that rented vehicles (underwritten by the insurance policy holder) and company cars are not eligible.
It is not a legal requirement to have such a policy. Employers can therefore choose whether or not to request this form of coverage for their employees.
Not all Business Assignment Insurance policies are alike. There are always conditions, which can vary depending on the particular type of policy which has been underwritten and the insurer. For example, some Business Assignment Insurance policies require a police report to be drawn up within eight days, whereas others place a limit on the frequency of the business assignments which are covered etc.
It is therefore vital for companies to ensure that their policies are adapted to suit their specific needs and their employees. Go through the policy in detail and discuss it with your provider before signing.
To avoid any confusion, we have summarised the options and consequences for the people involved using practical examples.
Mr X collides with Mrs Y’s car.
Mr X was driving to an assignment on behalf of his employer.
It is important to make a clear distinction between damages to third parties and damage to the employee’s own vehicle (Mr X).
- In the case of damage to third parties, the civil liability function of Mr X’s personal civil liability vehicle insurance provider is activated.
- In the case of damage to one’s own vehicle(s), Mr X’s Comprehensive Business Assignment Insurance function is activated.
Damage to third parties must always be reported under the (legally required) civil liability policy in the name of the vehicle’s policy holder.
Given that the policy holder’s own civil liability insurer will then intervene, the Comprehensive Business Assignment Insurance policy is not applicable.
The claim made under the personal civil liability car insurance policy may therefore affect the no-claims bonus of the employee in question.
Case study: Mr X fills in the claim form and sends it to his personal car insurance provider. (Mrs Y also sends a copy to her civil liability insurance provider)
If an employee damages their own vehicle, they may submit a claim under the Comprehensive Business Assignment Insurance policy, with the employer’s permission. The employer must ensure the policy is not abused and is only employed for accidents which are eligible.
If the policy conditions are met, the employer’s insurer will make a contribution, according to the previously agreed policy conditions. The Comprehensive Business Assignment Insurance policy is an extra advantage for the employee.
It gives employees an extra guarantee when they have to travel for work, in addition to their personal civil liability car insurance policy.
In legal terms, the person involved is free to choose which policy to employ when filing the claim. However, given that the Comprehensive Business Assignment Insurance policy is an additional form of coverage, it may only be implemented when the person involved has first exhausted the options offered by their own personal insurances (personal civil liability car insurance policy). As such, employers can limit the frequency with which the Comprehensive Business Assignment Insurance policy can be called upon, thus preventing your accident statistics from mounting up and avoiding an increase in the pertaining premium.
Case study: Mr X submits the claim form to his employer, who will send it to their Comprehensive Business Assignment insurance provider.
Example: Your employee puts in a claim under their own comprehensive insurance policy. As the Comprehensive Business Assignment Insurance policy is an additional form of coverage (see policy terms and conditions), the insurer may intervene to compensate for the difference in the excess offered by the personal car insurance provider. The excess of the Comprehensive Business Assignment Insurance policy is then applicable.
Case study: the excess under the Comprehensive Business Assignment Insurance policy held by Mr X’s employer amounts to €500. The excess offered by his own car insurance provider is €1,000. Mr X can therefore claim €500 from the Comprehensive Business Assignment Insurance policy.
So, the answer to the question is: If a car accident takes place while an employee is carrying out a work assignment with their own vehicle, and there is damage to third parties, this can indeed affect the no-claims bonus of the employee in question.
For the damage to their own vehicle, the employee may submit a claim under their own civil liability policy for their vehicle as well as the employer’s Comprehensive Business Assignment Insurance policy.
If you would like more information about this topic, please contact us at your leisure.