Coverage of employees

The Road Traffic Act 1988 and the Employers’ Liability (Compulsory Insurance) Act 1969 in combination provide complete coverage for an employee injured at work where the injury arises out of the use or negligent use of the employer’s motor vehicle. In some cases the employers’ liability policy is required to respond, as is the case where an employee is run down by a workmate, while in others the motor liability policy is required to respond, as is the case where the employee is a passenger. The demarcation line between the two regimes is not always clear, a point illustrated by Axa Insurance UK plc v Norwich Union Insurance Ltd [2007] EWHC 1046 (Comm).

The legislative background

The history of the relationship between employers’ liability and motor insurance is long and not particularly glorious. The starting point is the position before 1972, under which compulsory motor insurance (which was first introduced by the Road Traffic Act 1930 and under later Acts using much the same wording) excluded from the compulsory motor insurance requirement an employer’s liability for the death or injury of any person arising out of and in the course of his employment. As there was no compulsory employers’ liability insurance regime in force at that time, the position was that unless the employer happened to have a liability policy there was no ultimate protection for an injured employee in the event of his employer’s insolvency. The exclusion for employees remains the law, the relevant section now being s145(4)(a) of the Road Traffic Act 1988. under which ‘the policy shall not … be required … to cover liability in respect of death, arising out of or in the course of his employment, of a person insured by the policy or of bodily injury sustained by such a person arising out of and in the course of his employment’ .