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The ins and outs of insurance as part of a mobility budget

The transition from company cars to mobility budgets can be a complex journey, requiring employers and employees alike to adopt a ‘smart mobility’ mindset and giving employees more freedom to make their own mobility choices. But with freedom comes responsibility… and one responsibility that is often overlooked is the need for adequate insurance. So who is responsible for ensuring that employees are properly insured during multi-modal business travel? And what should companies consider in the context of insurance for alternative mobility? For advice, I spoke to Eelco van de Wiel, an international expert in fleet and mobility insurance.

Insurance is one of those topics that people usually prefer not to think about. Why is it so important in the context of the transition to mobility budgets?

When transitioning to alternative mobility, most companies tend to focus on sustainable and eligibility-related aspects, so insurance is far from ‘top of mind’. But the shift away from company cars opens up a whole new world of risks and responsibilities. This stems from the fact that employers have a legal duty of care; they are responsible for providing a safe working environment for employees, not only on the premises but also while on the move for work.

It is becoming a lot more difficult for employers to do that due to the complexity of today’s multi-modal journeys. Plus we’re seeing lots of grey areas emerging, such as the commute to and from work – which varies from country to country – and the private use of cars or even e-bikes purchased using a mobility budget.

Why can a mobility budget mean that the approach to insurance is no longer fit for purpose?

Traditionally, a vehicle provided through a company car scheme is covered for own damage, third-party liability and passenger insurance. So an employee who drives to a client meeting in their company car is fully insured from door to door, as are any passengers. But what about the employee who travels to the same appointment using several forms of mobility, such as by cycling to their local station on the e-bike they purchased with their mobility budget, catching the train, and then getting a lift from the station to the client’s office from a colleague in the private car they purchased with their own mobility budget?

Eelco van de Wiel, expert in fleet & mobility insurance

The level of insurance coverage varies for each leg of that journey, depending on what kind of insurance the employee, the rail company and the colleague have arranged individually. In the case of the colleague, they are only legally required to take out third-party liability insurance, so passengers might not be insured at all. If an accident happens and that particular mobility option is under-insured, you as the employer could be leaving yourself wide open to a legal claim for failing to fulfil your duty of care.

Are the potential damage costs of a claim the only risk?

Besides the cost of the financial payout itself, any under-insured claim can cause a lot of stress for the employee concerned and for those colleagues having to cover for them in their absence. On top of that, managers often have to spend a huge amount of time dealing with the administrative fallout, plus there’s the chance of reputational damage to the company. On the flip side, there’s also a risk of money being wasted due to over-insurance. This can happen when organisations take out insurance for scenarios that are already covered by the employee’s personal insurance policy, or vice versa.

But how can we shoulder responsibility for ensuring appropriate insurance coverage for each employee and every form of mobility?

One way to do this is to ask every employee to provide proof of insurance cover for all the ‘mobility objects’ that they make use of, whether cars, bikes or whatever, so that you can demonstrate that you have fulfilled your duty of care in the case of an accident. However, this becomes complex for employees who use multiple modes of transport. Therefore, we’re seeing a shift towards insuring the person rather than the object. This ensures that all modalities are covered. It might even make sense for some employers to consider a corporate policy covering work-related travel for all employees – with or without a mobility budget. It largely depends on the organisation’s individual situation.

Do you have any general advice for all organisations?

Start by clarifying the employer's duty of care requirements to employees and the adequacy of their current insurance schemes and policies. This should include an assessment of the situation per country and per risk profile. However, if you are one of the many people who don’t enjoying thinking about insurance, enlist the help of an expert who does!

Is it time for action?

Contact Eelco for more information and advice on insurance solutions for alternative mobility (including a scan of your current mobility insurance policy) or Saskia for guidance during the transition from a company car policy to offering alternative and sustainable forms of corporate mobility.

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