IRDAI Mandates Insurance Coverage for Employees in Employer’s Vehicles
HYDERABAD, October 19, 2023 – The Insurance Regulatory and Development Authority of India (IRDAI) has instructed insurance providers to include a mandatory insurance cover for employees who travel in their employer’s vehicles. This coverage will be provided as an integral part of the compulsory third-party (TP) liability section of private car insurance policies. The directive stipulates that no extra premium will be applied until future guidance is provided.
This move stems from a Madras High Court directive to IRDAI, which aimed to address the challenges faced by employee claimants in accidents involving their employers’ vehicles. The court noted that in such cases, recovering compensation has often been a protracted process, causing undue hardship to claimants.
Executive Director (Non-Life) Randip Singh Jagpal clarified that this new coverage, falling under IMT-29 of the Indian Motor Tariff, will be automatically included in both bundled policies and standalone policies covering compulsory motor TP liability.
Previously, the Indian Motor Tariff of 2002 allowed for optional coverage for employees in employer-owned private cars, with an additional premium. The IRDAI’s new directive now makes this coverage compulsory, simplifying and strengthening employee protection.
This article was originally published on October 18, 2023.
