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Road travel is an essential part of Australian businesses where out-of-office meetings and supplier visits are routine. In the absence of company-owned vehicles, employees hit the road as part of a “grey fleet”. But what exactly is a grey fleet? Acknowledging the responsibilities and managing risks from grey fleets are duties both employers and employees need to understand.
What is a Grey Fleet?
Grey fleet is a term used to classify privately-owned vehicles, including privately leased and rented cars, which are utilised to carry out business functions, excluding travels to and from employees’ homes. This type of vehicle use falls under the "grey" area where uncertainty on responsibility and accountability lies.
Companies may think that paying for the use of a personal vehicle, either through reimbursements or leases, exempts them from corporate obligations and liabilities. The Work Health and Safety Act says otherwise.
What Does The Work Health And Safety Act Say About Grey Fleet?
Like any asset used for work, the use of privately-owned vehicles for business-related functions generally comes under the company's responsibility. The Work Health and Safety Act states that a workplace includes a vehicle. The national guide “Vehicles as a Workplace” extrapolates that any vehicle used for work, including privately owned or leased vehicles, is considered as part of the workplace, thus any associated risks must be managed.
Risks associated with grey fleet should therefore be managed based on the concept of traditional fleet management. The general expectation is that employers implement a system that ensures drivers are well-trained and their automobiles are road-worthy and adequately insured. Companies are generally required to create governing policies for their grey fleet similar to what is in place for in-office assets. This is to maintain the safety of employees working both inside and outside the office.
Do Personal Car Insurance Policies Cover Grey Fleet?
Basic personal car insurance policies generally cover losses from collisions and non-collision incidents such as fire and theft for non-commercial use of the car. However, it becomes complex when insured private vehicles are used for work. Grey fleet cars require insurance coverage for business travel, which may or may not be part of the owner’s insurance coverage.
If a worker is involved in a crash while driving for business purposes in a car that is only insured with a personal car insurance policy the insurer may void the coverage. This may leave the business liable for the costs related to the incident.
Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.
A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.
If a worker is involved in a crash while driving for business purposes in a car that is only insured with a personal car insurance policy the insurer may void the coverage. This may leave the business liable for the costs related to the incident.
It is important for a business which includes a grey fleet to be across the level of insurance coverage of its grey fleet. Insurance requirements should be clearly outlined in any grey fleet policy created by the business and measures should be in place to audit compliance to these requirements. The absence of company policies surrounding grey fleet opens the business up to significant business risk.
So what do employers need to do? Manage risks before they happen.
How To Be Grey Fleet Compliant?
The first step to becoming grey fleet compliant is to create a company policy that clarifies the expectations, rules and processes around the use of personal cars for work purposes. Records should be kept to demonstrate compliance to these policies.
Here are some suggestions you can follow to safeguard your company from possible issues that may arise from grey fleet:
- Start the right way
a. Conduct road safety training for employees who use personal vehicles for work
b. Educate drivers about company policies on grey fleet - Cover the basics
a. Ask for employee driver's licenses
b. Monitor car maintenance records for all vehicles in your grey fleet - Maintain supervision
a. Perform regular vehicle safety checks
b. Hold regular driver training sessions
Employers have the right and responsibility to have information about their employees and the personal vehicles they use for work. Companies must carefully assess, regulate and document the use of grey fleet to establish safety for their employees wherever they are.
Keep employers moving and businesses growing responsibly. Talk to an insurance broker today and cover all possible risks from grey fleet before they happen.
General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.
All information above has been provided by the author.
All information above has been provided by the author.
ADVISR, ABN 17 613 588 266
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