On The Right Road?
When and where do different vehicles need Road Traffic Act (RTA) cover? When will Public Liability cover suffice? Tom Aldridge at TL Dallas explores these questions, which have become more complicated after the statutory requirement for compulsory vehicle insurance altered – so that now vehicles must be insured for use on a road or other public place (Section 143 Road Traffic Act 1988 as amended by the Motor Vehicles [Compulsory Insurance] Regulations 2000).
Over the years, discussions surrounding this change have highlighted situations where individuals – whether members of the public; staff; or, in the case of golf and country clubs, paid-up club members – could be exposed to injury from mechanically-propelled vehicles (MPVs). In many cases, the MPV may not fall within the definition of the Road Traffic Act 1988. This states a ‘motor vehicle’ is a mechanically-propelled vehicle intended or adapted for use on roads.
The golf buggy, the luggage trolley and the zoo bus are, in many cases, direct derivatives of the ubiquitous milk float, which is certainly intended for use on roads.
Private or public?
A better starting point is to perhaps define what does not amount to a road. The simple answer is “private land to which the public does not ordinarily have access”. However, even this definition is open to argument and caution needs to be exercised.
Using the example of a private golf club, we need to question just how ‘private’ most of these are. In many cases, most private courses advertise that visitors are welcome. In addition, we have competitions such as The Open where the course and its facilities are swamped by paying spectators. For these reasons, a ‘private’ establishment can be very public indeed.
In all of these situations, people are exposed to MPVs – on the course; on paths; on access roads; and in car parks. Sooner or later, there will be a claim large enough to attract the attention of the public liability underwriter or, alternatively, there will be no insurance at all and an enterprising solicitor will involve the Motor Insurance Bureau.
Just think about it – perhaps at Carnoustie in July 2018, Rory McIlroy has a three-foot putt for The Open and he catches his fingers in the door of a golf buggy driven by a 15-year old volunteer. Itis only in such an extreme case that one could expect to see a definitive legal judgement and whether ‘intended or adapted for use on roads’, or ‘other public place’ will actually be clarified or expanded upon.
In Scotland, the consideration of the meaning of a road has particular significance due to the “right to roam” legislation – which gives members of the public the rights and access to cross land for recreational purposes, provided they exercise the right reasonably and provided it does not adversely affect privacy of the landowner. We would therefore encourage clients to effect Third Party (TP) Motor cover for anything self-propelled used anywhere in Scotland.
Commercial Motor insurers remain able to provide Third Party Road Risks cover at a relatively nominal cost on virtually anything self- propelled. The following could be considered to be amongst the advantages of Third Party Motor cover, in comparison to Public Liability (non Motor) cover:
|Limit of Indemnity||Public Liability policies ordinarily have more modest limits compared with TP Motor policies – which of course legally require to provide unlimited TP injury limits, as well as a TP property damage limit for non-cars (normally this is £5M, but can be higher).|
|Excess||The RTA obviously prohibits the imposition of an Excess/Deductible on TP Motor claims. Public Liability policies ordinarily have Third Party excesses; usually property damage but sometimes, and increasingly, also personal injury. The Public Liability policy excess is often relatively high when out with the traditional composite providers.|
|Protecting your claims experience||In our portfolio of commercial clients, typically, the Combined Liability policy is the largest spend in the client’s programme. Protecting the claims experience on that policy is therefore arguably paramount to avoid the risk of penal terms being applied to the Policy which could impact on client’s Liability spend.|
The British Insurance Brokers’ Association’s (BIBA’s) counsel is always to effect Third Party Motor cover as opposed to relying on the likelihood of a Public Liability non-Motor cover responding; the ultimate fears of reliance on the latter being at some point when a large claim (inevitably) occurs, a senior Public Liability underwriter and/or an enterprising lawyer could potentially make the case precedent for a Motor policy being the only source of indemnity available to an aggrieved policyholder. The larger the claim, then arguably the more likely this outcome could occur.
With thanks from insight supplied by British Insurance Brokers’ Association (BIBA).
If you would like to discuss this topic in more detail, please contact your Account Executive or local TL Dallas office.
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