Ashley Minors, Director at specialist insurance broker Boswells, speaks about the risks in the CV sector.
Whether your involvement in the commercial vehicle market is in manufacturing, converting, retail or repair, there is no escaping the issue of insurance. Therefore, obtaining the right level of cover for the particular needs of your business is essential according to Boswells’ Ashley . “Premiums on almost every occasion are higher for clients involved in the CV market,” he explains. “In terms of employer’s liability there is an increased risk of accidents in the workshop because smaller companies tend to suffer more from accidents”
Minors makes the point that some claims may still be covered even if the client hasn’t complied with legislation. “However, the insurance company will find it very hard to defend the claim if the client doesn’t have a health and safety policy or hasn’t carried out a risk assessment,” he stresses. “If the company has complied, then the insurance company can go to the injured person and say ‘you’ve had training, been shown how to operate the machinery and been given personal protective equipment’..” Under the employer’s liability cover, the company can demonstrate that they have complied with the terms of their policy and existing legislation.
He adds that in such cases the number of spurious claims is much lower, as is the amount of serious accidents.
Interestingly, thefts from CV workshops and factors are really not an issue according to Minors. “They make up a very small percentage of claims,” he stresses. Indeed the bulk of claims in workshops and depots relate to everyday activities such as safe lifting and carrying.
One of the major challenges the sector faces according to Minors is the comparative lack of insurers that are willing to deal with CVs. “There might be 20 insurers willing to deal with a light vehicle motor factor, but there might only be three or four who are willing to deal with a CV workshop,” he says. “ This means that the markets available are reasonably limited.”
Insuring a fleet of HGVs is an expensive business, but getting the right cover is imperative, especially if you are moving goods belonging to a third party. In which case, the goods in transit will also need to have appropriate cover.
A further complication arises in the heavy recovery industry where recovered vehicles and whatever cargo they have on board also needs to be insured. “It’s not an area that insurers are keen on,” says Minors. “For example, say our CV recovery client left the recovered vehicle at his yard and there is a fire. In which case it would be our client that is responsible for damage to the vehicle and to the goods. It’s fairly infrequent, but it’s these technical issues that some brokers miss – and it could cost hundreds of thousands of pounds.”
Excess is another issue that is commonly misunderstood. It is hard to comprehend, but having a higher excess can actually save a fleet a considerable amount of money. “Very often a client will come to us with a £250 excess on each vehicle and when I sit them down I’ll ask them that if their driver caused £20,000 of damage to a third party’s vehicle, but only scratched the bumper on their CV, would they bother claiming? They’ll generally say ‘no of course not – we’d just go to a body shop and get it repaired’.
“They often don’t understand that the excess only applies to damage they claim for their own vehicle. By increasing the excess to, say £1,000, the client gets a nice discount and they probably wouldn’t have bothered claiming for the small damage anyway.”
There are, however, some advancements that may actually reduce premiums in the sector. The first of these is the increased use of on-board telemetry in vehicles – after all, insurance is about risk so proving a safer fleet can pay off significantly. “Already, at the heavy end, insurers are insisting on telematics and offering incentives and rewards to drivers who perform well. In the future, I think it’s something that will be fitted on every vehicle in the fleet,” notes Minors.
A greater use of on board cameras will also play a part in assessing risk and preventing fraudulent claims says Minors. “HGVs particularly tend to be ‘picked on’ because they are an easy target and have the firm’s logo painted down the side,” he explains. “Also, because it is possible for a car to make contact with a heavy vehicle without the driver noticing, it can leave the client exposed, but a camera offers cast-iron proof and also gives information like the exact time and date as well as visibility and what the weather was doing at the time.”