What is the deal with business car insurance that insurers need to be cautious whenever they grant a policy to a company? The thing is, although the concept of this type of coverage is simple on the part of the insured, the same is not really true on the part of a provider. There are some issues which a company must take into consideration in deciding whether or not to issue a policy to an applicant.
The first issue is that having different employee drivers means there will be a lot of people behind the wheel – not necessarily those who are designated to drive. This is a normal occurrence in every corporate setting, especially those with limited manpower. Business car insurance providers must know who are authorized to drive a vehicle for them to know if there are certain risks involved which are not present with other drivers. With this, an insurer can make conditions.
The second issue is the fact that not all employees who can start a car can actually drive. What’s worse, there are employees who are allowed to drive even if they do not yet have licenses. If a company vehicle is under a business car insurance policy, it is totally under the mercy of an unlicensed or unskilled driver.
Another issue is the reality that just because someone got his license does not mean that he is a skilled driver. Okay, this is more of a lapse from the DMV, but it is true nonetheless. A provider must be sure that any person who will be operating an automobile is not only qualified to do so, but he must also be sufficiently skilled.
In light of these issues, what should an insurer do?
Before deciding on a business car insurance application, agents must conduct a background check on all drivers of the company. This will mean studying driving records and employment history, as well as circumstances when they got licensed.
Also, a contract drafter must include a disclaimer clause to the effect that if an insured automobile is damaged in the hands of someone who is unqualified, the insured forfeits the proceeds of a policy. This clause is a perfectly legal and a proper way to make sure that the principal is not at a losing end.
Finally, make some requirements that the company will be forced to employ only skilled drivers. However, make sure that additional requirements are not unreasonable, lest you risk losing clients. The only thing an insurer and an insured need to agree on is that the latter must maintain diligence in the ranks.
