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Motor Insurance
Thursday, November 1, 2007
Some homely advice

Many entrepreneurs seem unaware of the need to inform their insurer when they begin using their vehicle for business purposes.

Lourens Joubert, Head of Commercial Underwriting at Santam says, “Whether you are starting a big business, a working mom starting a small home industry, or an estate agent, and you are using your car for business purposes then you need to inform your insurer to update your car insurance policy.
“Depending on the extent of use, you may be able to retain your personal, non-commercial, policy by adding cover for business use, or it may be necessary to take on a fully-fledged commercial policy.”
He says that by using a vehicle for work purposes means a driver is clocking up more kilometers, spending more time driving in congested traffic and therefore increasing risk.
“Obviously the frequency of business use and the type of business will need to be taken into account as well as whether or not the vehicle is being used by an employee.
“Employees are not covered under the standard commercial motor policy if death or bodily injury should arise from the course of their employment. Compensation for such a loss is payable in terms of the Compensation for Occupational Injuries and Diseases Act (COIDA).
“However,” Mr Joubert adds, “should the accident occur before or after working hours – therefore being outside the scope of their employment, the commercial motor policy would also cover the claim in circumstances where the insured was legally liable for the accident.
“COIDA will also grant compensation for employees who are provided with free transport to and from work by their employers, provided the vehicle was driven by the employer or one of their employees.
“An employee is obliged to lodge a claim for compensation in terms of COIDA, and may then approach the Road Accident Fund (RAF) for any further compensation. The RAF will only pay out over and above the COIDA payment, not in addition to it.
“Passenger liability cover, other than for employees or members of the insured’s own household, for private vehicles or vehicles with a carrying capacity of less than 1 500kg, is usually included under the standard commercial motor policy. Owners of vehicles falling outside this description can purchase passenger liability cover for an additional premium.”
 

Copyright © Insurance Times and Investments® Vol:20.10 1st November, 2007
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