Archive August 2009

Car Crime – Drivers Beware

14/08/2009 in Motor Fleet Insurance

Drivers are increasingly falling victim to a new kind of car crime – staged or deliberate motor accidents where someone deliberately causes an accident with an innocent motorist, with the intention of making a false or inflated insurance claim.

Since 1999 there have been over 22,500 fraudulent staged and induced motor accidents. Research by Royal & Sun Alliance (R&SA) reveals that 41% of British drivers have never heard of this crime. A further 4 out of 10 would not know if they had been in a staged accident and only around half of British drivers would know what to do if they suspected they had been involved in an intentional collision.

A typical staged accident occurs when someone deliberately causes an accident with an innocent motorist. The fraudsters frequently increase the amount that they are claiming from the victim’s insurance company in various ways, such as by adding non-existent or phantom passengers to the claim. The criminals may also use “friendly” third parties, such as mechanics and doctors, in their claim to make it look genuine. The innocent victim can then be left with an increase in their motor insurance premium and can often lose their valuable no claims bonus.

Countering fraudulent claims

RSA’s UK counter fraud manager, ex-Metropolitan Police Detective Superintendent John Beadle, has recently been made chairman of the new Insurance Fraud Bureau (IFB) – an organisation launched in July 2007 by insurers with the aim to clamp down on and expose organised insurance frauds such as staged motor accidents.
He said: ‘Staged motor accidents are on the rise and are potentially extremely dangerous. Not only do they cost honest drivers millions of pounds each year, but they also put innocent motorists in danger. Staged or deliberate motor accidents are on the increase.

We urge people to take note of our guidelines in the event that they may become victims of this crime.

There are usually some tell-tale signs that you have been involved in a fraudulent collision. Motorists should pay extra attention to people braking suddenly in front of them for no apparent reason or otherwise driving erratically.

Business Fraud

14/08/2009 in Business Combined

Commercial fraud or Fidelity Guarantee insurance cover has been available for many years. However, many businesses have been reluctant to take this cover either because they felt they had a loyal and trustworthy staff or it seemed to demonstrate a distrust of the staff. Sadly, evidence suggests that many businesses have been seriously hurt financially following fraud by an employee.
Specific fraud risks are:

Fraudulent diversion of funds

Fraudulently creating and approving purchases

Falsifying, either individually or in collusion with others, the financial accounts to enable the payment of salaries etc

Helping external parties falsify the provision of goods and services

Theft of stock by employees or in collusion with a third party

Theft of your own or client funds

Stealing or forging company cheques

Recently commissioned research showed directors or senior managers committed almost two thirds of the fraud cases surveyed. A third of all fraud was committed by long standing employees of between 10 and 25 years service. One half was done in collusion with others and youngsters under 25 make up a very small proportion of perpetrators.
There are potential pointers to fraud such as:

Certain customers or suppliers dealt with exclusively by one employee

Personal lifestyle not matching income

Refusal to take holiday entitlement

Mundane tasks retained rather than delegated

The cost of Fidelity Guarantee cover can be relatively low in relation to the potential financial loss you could suffer. It is sensible to add this cover to your existing insurance portfolio alongside other policies intended to protect your business from specific unforeseen financial harm. We would be happy to obtain a quotation for you.

Duty of Care – Fleet Management

14/08/2009 in Motor Fleet Insurance

Regardless of how many vehicles you operate, there is legislation that governs road safety, including the various Road Traffic Acts and Regulations supported by the Highway Code.
In addition, there are a number of related Statutes that are intended to safeguard road-users. These include Regulations covering the construction and use of vehicles, special health and safety legislation and Regulations covering the carriage of dangerous goods by road.

The main responsibilities imposed by this legal framework fall on the shoulders of road users and vehicle owners.

When vehicles are being used or driven on the highway by persons working for an employer under a Contract of Employment, the employer has duties of care which are responsibilities under the Health & Safety at Work Act 1974 and also they have a Common Law duty of care. This means that under this ‘duty of care’ an employer must take reasonable care to protect employees from the risk of foreseeable injury, disease or death whilst they are at work.

It is important to note that the vehicle is considered to be a place of work.

The main responsibilities under the Road Traffic Acts are towards the driver of the vehicle. He/she is responsible for driving a safe vehicle, adequately maintained and insured, in a safe manner having due regard to other road users and pedestrians. The employer has a duty towards providing a safe vehicle and insurance if the vehicle is owned by the employer.
There are three key areas for risk management that you need to give attention to:

Driver

• Driver vetting and selection
• Induction procedures
• Licence checks
• Accident reporting procedures

Vehicle

• Vehicle suitability
• Vehicle maintenance and inspection
• Vehicle security

Journey

• Journey planning
• Managing driver fatigue
• Speed management
• Journey type

The Health & Safety Executive (HSE) has an occupational road risk publication.

A copy of the ‘Driving at Work’ leaflet can be downloaded at:

http://www.hse.gov.uk.pubns/indg382.pdf Persons found guilty of breaching Road Traffic Law can be subject to a wide range of penalties including prison for serious offences. Breaches of Health & Safety Law may result in a fine or imprisonment. Directors may be liable if it can be shown that their negligence contributed directly to an injury.

Corporate killing

A criminal offence of corporate manslaughter has been drafted, making it easier to prosecute companies responsible for fatal accidents.

The offence will apply when someone has been killed because senior management “grossly fails to take responsible care for the safety of employees or others.”

The maximum penalty will be an unlimited fine.

The employer’s responsibility also extends to ensuring that private vehicles used by employees on “company business” are also operated in a lawful manner.

Checks by the employer should include a vehicle’s mechanical fitness i.e. MOT test (if over 3 years old for cars), service and maintenance records and regular vehicle condition reports.

They must ensure that the driver has “business use” insurance cover and that the driver is suitably licensed to drive that vehicle.

Key action points

• Carry out a risk assessment
• Produce a Health & Safety Policy, which includes your procedures to manage driver safety
• Ensure all licences are checked at least annually
• Regularly record maintenance and service details
• Record all training that has been completed