The Insurance Regulatory and Development Authority of India (IRDAI) has directed insurers dealing in motor insurance to provide mandatory third party (TP) cover to employees travelling in employer’s vehicles.
The Insurance Regulatory and Development Authority of India has directed insurers to provide the cover under IMT-29 of the Indian Motor Tariff while issuing the mandatory TP to private car policy for such vehicles, saying no additional premium shall be charged till further orders.
The IMT-29 cover is to be provided as an in-built cover under the compulsory motor TP liability section of private car package/bundle policies as well as under standalone policies insuring compulsory motor TP liability, Executive Director (Non-Life) Randip Singh Jagpal said.
This follows the Madras High Court’s direction to IRDAI to make IMT-29 mandatory as a built-in cover for employees while issuing a private car policy for such vehicles. The High Court had observed that in cases where employees travelling in private vehicles of employers meet with an accident resulting in injury or death, it becomes a nightmare for the claimants to recover compensation from the employer. This results in the claimants suffering endlessly after losing their sole breadwinner or sustaining injuries, IRDAI said in its notice to insurers.
The regulator said the Indian Motor Tariff 2002, under Clause 7 of Section 2, provides for a specific situation where a private car owned by an employer and used to transport employees is involved in an accident. The clause provides that the liability of such employees, including the paid driver, if any, shall be covered on payment of an additional premium of ₹50 per employee – the number of such persons not exceeding the maximum authorised seating capacity of the vehicle. The additional premium of ₹50 per employee is net irrespective of the period of insurance, which shall not exceed 12 months.
