IRDAI mandates insurance cover for staff travelling in employer’s vehicle 

Insurers must provide IMT-29 cover as an inbuilt feature in motor TP policies for vehicles used to carry employees. No additional premium is to be charged. This follows Madras High Court's direction to IRDAI to ensure employees travelling in employer's vehicles are covered. IMT-29 provides liability cover for employees in case of an accident, with an additional premium of ₹50 per employee.

Insurance regulator IRDAI has directed insurers dealing in motor insurance to compulsorily provide as an inbuilt feature in the mandatory third party policy (TP) cover to employees who travel in employer’s vehicle.

Mandating insurers to provide the cover under IMT-29 of Indian Motor Tariff, while issuing the mandatory TP to private car policy for such vehicles, the Insurance Regulatory and Development Authority of India said no additional premium is to be charged until further directions.

The IMT-29 cover is to be provided as an inbuilt coverage under the compulsory motor TP liability section of private car package/ bundled policies as well as under standalone policies insuring compulsory motor TP liability, Executive Director (Non-Life) Randip Singh Jagpal said.

This follows Madras High Court directions to IRDAI, to make IMT-29 compulsory as an inbuilt coverage for employees while issuing a private car policy for such vehicles. The High Court had observed that in cases of employees travelling in private vehicles of the employers meeting with an accident resulting in injuries or death, it becomes a nightmare for the claimants to recover compensation from the employer. This leads claimants to suffer endlessly having lost their sole breadwinner or having suffered injuries, the IRDAI cited in its communication to the insurers.

The regulator said the Indian Motor Tariff 2002 under Clause 7 of Section 2 provides for a specific situation wherein a private car owned by an employer and used to carry employees is involved an accident. The clause stipulates that the liability of such employees, including the paid driver if applicable, be covered on payment of additional premium at ₹50 per employee – the number of such people not exceeding the maximum licensed seating capacity of the vehicle. The additional premium of ₹50 per employee is net irrespective of any period of insurance not exceeding 12 months.