Insurance tips for the small fleet operator

According to Jason Mellow, head of alternative distribution channels at MiWay, insuring your businesses vehicles is absolutely essential, as they are necessary for your business operations and repairs are likely to be costly. “Do not skimp on insurance or think of it as a ‘nice to have’,” he suggests.

Mellow gives some tips for better management of your businesses vehicle insurance:

• Pricing can be managed by assigning a maximum of five regular drivers to vehicles. In most instances, this significantly reduces the premium charged, as the likelihood of personal accountability is improved. Fleet owners should also update their insurer when new drivers are introduced.

•The use of a vehicle plays a role in deciding which kind of policy should be purchased. It is irrelevant whether the insured wants to insure only one or several vehicles. Bear in mind that a personal lines policy will not cover stock or equipment carried in the vehicle, whereas the business insurance policy will cover such items.

•Business insurance usually covers the vehicle for company use only, so limit the amount of personal use of vehicles by staff. Any incident caused “after hours” can result in the business owner being liable for damage.

•Automatic liability cover is included in most policies. This will cover damage caused to a third party’s property or person. Passengers within the vehicle who are injured cannot claim under this section, but are able to do so from the Road Accident Fund.

•Fleet owners should consider selecting a flat excess rate rather than the percentage-based excesses popular in the industry. In the event of large losses, the unbudgeted expense of a percentage-based excess can prove very costly.

•Always read the wording of your entire policy and ask questions if there is anything you don’t fully understand. Don’t wait until you have to make a claim to debate terms and conditions. Clauses related to drivers’ licences must be clearly understood, as Professional Driving Permits (PrDPs) are often required for certain vehicle classifications and uses.            

•Do a little homework when sourcing any business service. When evaluating available services, go beyond evaluating the cover and pricing available, and also check service and consumer websites such as www.hellopeter.com and the Ombudsman Report.