Insurance Coverage – Owner Drivers versus Wages Employees

Recently, I was talking with a work colleague and we were discussing an employee and his near miss on the road.

The employee had been contravening some road regulations at the time and the discussion went down the line of what would have happened had he actually caused an accident and whether insurance would have paid out.

It was an interesting discussion and out of interest I phoned my Insurance Broker to ask him how the insurance companies would look at this situation. And it turns out that the Insurance companies can treat an accident differently depending on if the driver was an Owner Driver or a wages employee.

So Scenario One is a wages employee who is found to be speeding and as a consequence causes an accident. In this case, the insurance would pay out the claim – they may well try and recover from the employee later but at least the employer would be covered as it would be deemed that the employer had no knowledge or control over the actions of the employee at the time.

Now take that same circumstance but this time put an Owner Driver behind the wheel and the end result can be quite different.

The Owner Driver, who is the policy holder, is knowingly breaking the law by speeding and as a result is at risk of having the claim denied by the Insurance Company.

Scenario Two is the wages employee who has hung a heavy one on over the weekend. Too much alcohol and too little sleep but he rocks up to work and hops in the truck and takes off. Down the road he rolls the truck and the Police come out to find he is over the limit and he is subsequently charged.

Again because he is a wages employee the insurance would pay out as the employer had no knowledge of the driver’s weekend escapades and the driver had signed a fit to work declaration.

In this circumstance, if the truck had been driven by an Owner Driver then the claim would most likely be declined by the insurance company as the Owner Driver would have or should have, been aware of their alcohol affected situation and as such were knowingly putting themselves in a risky situation.

Had it been the Employer that put on a weekend function and provided the alcohol then it would have been the Employers responsibility to test the employees before allowing them to drive.

Basically, it all boils down to what the Employer (the policy holder) knows or should be expected to know.

An employer is often unaware of what the employees are doing up the road and so can’t be held responsible for their actions (unless they have contributed to them).

With an Owner Driver, there is no such excuse. The Owner Driver is obviously fully aware of their own actions and as such any action that is unlawful or risky and that compromises safety can see the Insurance Company reject the claim.

It is great to know that the Insurance companies will protect the employer when the employee does the wrong thing, but just know that they don’t show this same leniency to misdemeanours by Owner Drivers.