Is an employeer responsible for an uninsured employee(car)?

DylanII

Hi,
I was talking to my Aunt who owns a pizza shop and I found out that her delivery drivers aren't insured for delivering pizza, just normal insurance. Since she instructed them to do so could she be held responsible if they are charged for driving without insurance.

I thought that she could be held responsible and her employees couldn't be convicted, she could though? Would this be correct? She doesn't think so.

She hasn't had any issues but I'm a bit curious!

Victor

Yes, the employer could have a responsibility to members of the public. While the employer's insurance company may pay to third parties, they would then go after the employees or employer.

Potentially, the employer needs a public liability policy that includes motor insurance.

coylemj

DylanII wrote: »

Since she instructed them to do so could she be held responsible if they are charged for driving without insurance.

The RTA 1961 didn't anticipate the day of the freelance delivery man who owns his own car so it looks like your aunt is right....

(6) Where a person charged with an offence under this section was the servant of the owner of the vehicle, it shall be a good defence to the charge for the person to show that he was using the vehicle in obedience to the express orders of the owner.

http://www.irishstatutebook.ie/1961/en/act/pub/0024/sec0056.html#sec56

Mr Simpson

On this, it is pretty much impossible for an employee to get a policy to cover them to deliver pizzas. The employer has to get specific insurance on top of the employees policy. (I've tried pretty much every insurance company & dozens of brokers)

MagicSean

If they drive their own car then they are responsable for ensuring they have the right insurance. If they are driving a company car then they are equally responsable for ensuring the insurance is correct. Criminally speaking.

coylemj

MagicSean wrote: »

If they drive their own car then they are responsable for ensuring they have the right insurance. If they are driving a company car then they are equally responsable for ensuring the insurance is correct. Criminally speaking.

They are not responsible under civil or criminal law if the employer owns the car. Ultimately the owner of a vehicle is responsible in the case of a civil claim and if the driver is prosecuted for driving with no insurance, it is a 'good defence' to show that he was using the car in the course of his job, see my post above.

If a van driver is sent out on a Monday morning to deliver bread in a van owned by the bakery, he is off the hook in very respect if it turns out that there is no insurance policy on the van.

fasttalkerchat

I was told that if the drivers are self employed it is not the take away's concern how they get the pizzas delivered. They are uninsured but insurance for this is infeasible for most young drivers.
If they are "on the clock employees" this may change.

fasttalkerchat

coylemj wrote: »

They are not responsible under civil or criminal law if the employer owns the car. Ultimately the owner of a vehicle is responsible in the case of a civil claim and if the driver is prosecuted for driving with no insurance, it is a 'good defence' to show that he was using the car in the course of his job, see my post above.

If a van driver is sent out on a Monday morning to deliver bread in a van owned by the bakery, he is off the hook in very respect if it turns out that there is no insurance policy on the van.

Surely you would have to check that your insurance covers you for a company car or that the company has an insurance policy that covers you? Wouldn't it be a dual responsibility?

coylemj

fasttalkerchat wrote: »

Surely you would have to check that your insurance covers you for a company car or that the company has an insurance policy that covers you? Wouldn't it be a dual responsibility?

No, clearly the law is on the side of the employee and the provision about the 'good defence' is there to protect an employee who might otherwise be fired for refusing to drive an uninsured car or van owned by his employer if he was expected to bear some of the responsibility.

DylanII

The cars are not owned by my aunt. They are all supplied by the employees, they asked if they needed insurance and she said no. Just told them to use their normal insurance and they will be fine.

coylemj

DylanII wrote: »

The cars are not owned by my aunt. They are all supplied by the employees, they asked if they needed insurance and she said no. Just told them to use their normal insurance and they will be fine.

That is not good advice. The employees would definitely not be covered to do what are commercial deliveries. 'Use in connection with a trade or profession' is not covered, unless you notify the insurance company, tell them the nature of the work and they expressly give you cover which will involve replacing the cert. with a new one which will include the provision of driving in the course of their job.

If you are not carrying goods or samples and you want to occasionally use the car in the course of your work, they sometimes give you what is known as Class II restricted insurance for free. If you are carrying goods and/or samples, you need full Class II insurance which will definitely cost extra and delivering pizzas at night would probably involve a hefty topup on the premium because you'd be in and out of housing estates so probably considered a higher risk.

Asking her is silly in the first place - what else would she say? They should ask their insurance companies, they will give a different answer. If your aunt has any sense she should insist that the employees get Class II cover which includes an indemnity to the employer, otherwise she is wide open to a claim if the employee has an accident and their insurance company refuses to pay out because they were delivering pizzas.

fasttalkerchat

I was going to work for a big Pizza chain. They said that my car was my responsibility. They would not pay speeding fines or cover insurance etc.
I said that I would have to contact my insurer to see how much extra it would cost to add on business use and the employer said that most of there drivers just have standard insurance.

In the end it was more feasible to go for a regular hourly paid job.

coylemj

fasttalkerchat wrote: »

I was going to work for a big Pizza chain. They said that my car was my responsibility. They would not pay speeding fines or cover insurance etc.
I said that I would have to contact my insurer to see how much extra it would cost to add on business use and the employer said that most of there drivers just have standard insurance.

I think you'll probably find that the pizza shop was a franchise, I can't see a multinational corporation letting people drive around delivering their goods uninsured.

Based on the number of flyers that come through my letterbox for the pizza chains, competition must be pretty fierce so I'm not surprised they turn a blind eye to the insurance issue.

mathepac

DylanII wrote: »

The cars are not owned by my aunt. They are all supplied by the employees, they asked if they needed insurance and she said no. Just told them to use their normal insurance and they will be fine.

That's pretty scurrilous behaviour by your aunt, leaving the drivers exposed to prosecution for not having correct insurance.

They on the other hand are pretty careless if they don't check with their insurance companies.

fasttalkerchat

coylemj wrote: »

I think you'll probably find that the pizza shop was a franchise, I can't see a multinational corporation letting people drive around delivering their goods uninsured.

Based on the number of flyers that come through my letterbox for the pizza chains, competition must be pretty fierce so I'm not surprised they turn a blind eye to the insurance issue.

It is a franchise but no insurance was offered by either the franchisee or the franchisor. Seems to be standard practice.

coylemj

fasttalkerchat wrote: »

It is a franchise but no insurance was offered by either the franchisee or the franchisor. Seems to be standard practice.

It's not practical for takeaways to organise insurance for part time drivers with their own cars, the normal procedure if they're doing things properly is to get the drivers to organise their own Class II insurance which includes an indemnity for the employer.

krd

coylemj wrote: »

It's not practical for takeaways to organise insurance for part time drivers with their own cars, the normal procedure if they're doing things properly is to get the drivers to organise their own Class II insurance which includes an indemnity for the employer.

The rule is: Who gets sued?....Whoever has the most money.

The business owner can be liable in any instance of employees causing damages in the course of their employment. That's a "can" in inverted commas.

This isn't a case of the business owner being responsible for everything, but if there's an instance where the Pizza delivery guy hits and hurts someone, while delivering pizza, if their insurance company refuses to cover them (because they were engaged in commercial activities they weren't covered for), then the legal team of the person harmed will go after the business owner.

It's like this. If an employee does anything while they're in working hours, the business owner can be sued.

DylanII

So she would be financially liable but not criminally? And the drivers would be criminally liable but not financially (driving with no insurance)

I think she should be organizing insurance but she just won't listen.

mathepac

The usual scam pulled here is that the franchisee attempts to ensure that the delivery guys are not employees, making them buy (or pay for) the pizzas before delivery commences.

That way the link with the exploiter is severed in the event of an accident as any pizzas in the car "belong" to the driver who is operating his/her own pizza-selling & delivery business.

The drivers are usually paid €3 to €4 per hour and €2 to €3 per pizza delivered.

The Guards and the dogs in the street know about this illegal and exploitative set-up, but won't take any prosecutions despite the number of uninsured cars (and bikes and mopeds) involved in these disgraceful operations (see previous threads on boards,ie)

DylanII wrote: »

... I think she should be organizing insurance but she just won't listen.

Due to her lack of "insurable interest" (no ownership) in the cars concerned your aunt knows very well she can't take out insurance on them.

I have heard of cases on here where drivers have been told they are covered by some kind of "corporate insurance policy". Its just more lies and exploitation.

Once upon a time in a land Far Away, I worked for a highly regarded employer in the health-care sector and was told I was insured on a corporate policy to transport clients in my personal vehicle if they needed to see a GP or a dentist. One day I asked to see the policy and the cover document, on advice from my insurer, and guess what? There were none.

fasttalkerchat

mathepac wrote: »

The usual scam pulled here is that the franchisee attempts to ensure that the delivery guys are not employees, making them buy (or pay for) the pizzas before delivery commences.

That way the link with the exploiter is severed in the event of an accident as any pizzas in the car "belong" to the driver who is operating his/her own pizza-selling & delivery business.

The drivers are usually paid €3 to €4 per hour and €2 to €3 per pizza delivered.

That's pretty much what I was offered. They said I would get at least 6 deliveries per hour. I asked them to guarantee me £40 per 4 hour shift but they wouldn't, I asked if there are no deliveries on a certain night do I still get paid the £4 per hour and they said yes but you would be asked to help the kitchen staff...

Thanked him and withdrew interest at that point.

fasttalkerchat

About work use of a vehicle. My mum got a free add on on her policy to cover carrying clients because she is a social worker. 2 years later she got a new car and I was changing the policy details. I reminded them that she is covered for her business use. They said that that wasn't on the policy as it hadn't automatically renewed at the end of the first year!

DylanII

They are definitely employed by her. The way it works is they get the pizza, deliver it and get the money. They keep all of the money until the end of the night. When they close they pay for all the food and then are paid for their work.

Are you sure there is no policy she can get to cover them?
For most of them if they were to get the insurance they would be looking money to work because they are so young the insurance would be too much!

coylemj

mathepac wrote: »

The usual scam pulled here is that the franchisee attempts to ensure that the delivery guys are not employees, making them buy (or pay for) the pizzas before delivery commences.

That way the link with the exploiter is severed in the event of an accident as any pizzas in the car "belong" to the driver who is operating his/her own pizza-selling & delivery business.

That wouldn't stand up in court for the simple reason that the driver is not a party to the contract of sale. The customer has ordered the pizza from the shop, if he got food poisoning he would sue the shop, not the driver. No matter what fancy footwork they do with the money, the driver is not a party to the contract.

The driver is in the employ of the pizza shop no matter what way you look at it.

Mr Simpson

Firstly, all the Multi-national takeaways in Ireland are owned by franchisees.

The way it works in one particular franchise (I won't name it) is:

• Drivers are paid €4 per hour
• Then paid €2 per delivery
• They don't pay for pizzas up front, they pay at the end of the night
• There is no insurance provided by the franchise

However, in a more "upstanding" franchise:

• Drivers are paid roughly €11 per hour
• They do not get paid per delivery
• Franchise buys insurance for the year, they then charge drivers €2 per night for the insurance

No, insurance company in Ireland will provide insurance to individuals to cover delivery of pizzas (as you would be carrying other peoples goods for hire or reward). Also I reckon the driver is self-employed argument wouldn't stand should anyone end up in court.

mathepac

mmcn90 wrote: »

...
[*]Franchise provides insurance to all drivers, they then charge drivers €2 per night for the insurance ...

Can't be done; insurance doesn't work that way.

Mr Simpson

mathepac wrote: »

Can't be done; insurance doesn't work that way.

Sorry I should clarify, employer gets the cover (I assume pays for the year) and in turn charges their employees at a rate of €2 per night. I know that this is how certain franchises work.

mathepac

mathepac wrote: »

Can't be done; insurance doesn't work that way.

And I repeat it can't be done because insurance doesn't work that way. It is a stratagem to hide the fact that there is no insurance in place for the vehicle and the driver. The insurance may be to cover the pizzas (the franchisee's property) as the franchisee has no insurable interest in anything else.

lolz90

Having worked in a similar environment, the franchisee in this case had insurance taken out third party cover for all delivery drivers with Lloyds of London. Each driver paid a proportion of their delivery fee for the insurance.

If their was a claim to be made on the insurance, a claim form was issued by the broker and filled out in the usual fashion.

coylemj

mathepac wrote: »

The insurance may be to cover the pizzas (the franchisee's property) as the franchisee has no insurable interest in anything else.

This gets trotted out in insurance debates in the Motors forum every now and then - the claim that an employer cannot pay for insurance on a vehicle he doesn't own because he doesn't have an 'insurable interest'.

The fact is that almost every company car in Ireland is owned by a fleet management (leasing) company but it is the driver's employer who pays for the insurance so there is no legal impediment for someone other than the owner to pay for the insurance. In that case the policy would have a note to the effect that compensation under comprehensive insurance was to be paid to the leasing company.

The 'insurable interest' is simply the value of the vehicle which is a relatively minor matter because the principal reason for having motor insurance (leaving aside the legal obligation for a moment) is to cover potential third party claims. Given that an employer could potentially be liable for a claim if one of their employees has a crash while on the job, the insurance industry has no problem accepting premiums from employers even if they don't own the vehicles in question.

Mr Simpson

mathepac wrote: »

And I repeat it can't be done because insurance doesn't work that way. It is a stratagem to hide the fact that there is no insurance in place for the vehicle and the driver. The insurance may be to cover the pizzas (the franchisee's property) as the franchisee has no insurable interest in anything else.

It can be and is done, because it is the only way for delivery drivers to get insurance.

mathepac

coylemj wrote: »

...

The fact is that almost every company car in Ireland is owned by a fleet management (leasing) company but it is the driver's employer who pays for the insurance so there is no legal impediment for someone other than the owner to pay for the insurance. In that case the policy would have a note to the effect that compensation under comprehensive insurance was to be paid to the leasing company.

...

That situation is not analogous with the pizza delivery driver, in any shape, make or form.

If I have a car on HP, lease or lease-purcahse, when I take out insurance I am in exactly the same situation as any firm leasing vehicles for their employees.

I'm perfectly aware of the fact that brokers and insurers have no problem accepting premiums, just as paper never refuses ink, but I remain sceptical. To convince me that this "add-on" stuff works, I'd need to hear first hand information from an injured third-party who claimed successfully and got paid by one of these "2 quid per night policies".

mmcn90 wrote: »

It can be and is done, because it is the only way for delivery drivers to get insurance.

If so prove it, and it certainly is not the only way to get insurance of that kind. In fact I'm convinced in the absence of proof, that this "2 quid per night insurance" is all just smoke and mirrors.