Do your employees sometimes use their own vehicles for business use?
The answer to this question is more than likely ‘yes’. There are estimated to be over 14 million cars on the road that are privately owned by employees and are used for business use. This is many times more than the number of vehicles on the road that you would traditionally describe as being company cars or fleet vehicles.
These 14 million vehicles are often referred to as the ‘Grey Fleet’.
Simply put, these are the vehicles that are not owned or insured by a company, they are owned and insured by an individual employee of a company but are used for business use. They are also known as cash for car schemes.
As these vehicles are not company owned, it is much harder to control this element of your fleet, however, it is no less important. Failing to mange the grey fleet could lead to a dereliction of Duty of Care obligations which could result in a fine or even prosecution should an accident occur.
What should you be doing to mitigate the risk?
If your employees are using their own vehicles for business use, then they would need a minimum of ‘Class 1’ use covered on their motor insurance policy. Moreover, you should be checking that your employees’ vehicles have valid MOT’s, especially as most ‘Grey Fleet’ vehicles tend to be much older than company cars which are traditionally leased for a period of say 2 or 3 years and then exchanged for new vehicles.
If you have occasional business use included on your current fleet insurance, this will cover you for any business trips your employees make in their own vehicles. However, as per your normal fleet insurance criteria, you will need to make sure that these employees are complying with your current policy with regards to their motoring convictions etc. Otherwise, you risk exposing yourself to a gap in your insurance cover. Most insurers will expect you to document that you have made these checks with regards to your ‘Occasional Business Use’ extension.