Bus and coach insurance specialist Gauntlet has issued advice for passenger transport operators who are struggling to cope with the impacts of COVID-19 on their businesses.
Even prior to lockdown and school closures, operators were suffering from booking cancellations and restrictions on travel. Getting costs under control has never been more important and one of those costs is insurance. However, how to tackle this will vary from case to case, according to the patterns Gauntlet has so far observed in the market.
Gauntlet says insurer responses to policyholders’ situations vary greatly. Whilst some are reducing premiums for vehicles that are officially off the road from the DVLA’s point of view and which have SORN documentation, others are not.
Gauntlet claims that operators who have been loyal to both Gauntlet as their broker and to the insurer providing cover have achieved better outcomes on the whole. However, operators can rarely cancel their cover completely and would be ill-advised to do so. Damage cover remains important, particularly as fire and police services are witnessing an increase in arson, burglary and property damage, at the present time.
“Should an operator change their cover to ‘laid up’, insurers typically want to reduce protection to Fire and Theft cover only on the motor policy. Any malicious damage or vandalism would not usually be covered,” says Gauntlet managing director, Roger Gaunt. “The operator’s property insurers might offer to cover this risk but that is quite rare. The operator should really decide if they want to keep the vehicles on comprehensive cover, to retain protection for any damage to their vehicles whilst parked up.
“If vandals are happy to burn out two Iceland delivery vans and puncture the tyres of six ambulances, as in incidents reported (24 March), they will not think twice about attacking vehicles that are off the road and not providing essential services. In our view, damage cover remains a necessity.”
Another piece of advice asks operators to focus on the period ahead. Gaunt adds: “Staying loyal to your insurer at renewal means that you will be more likely to get help and a more flexible response from your insurer, if you need it, should the pandemic continue for some time.
“Operators should also try to lock in good terms for all their vehicles now, even those which are laid up. That way, when work returns, reasonable premiums will already have been agreed and insurers will not be able to take advantage when the market recovers.
“Try not to make knee-jerk reactions to situations, without thinking through the consequences. These are incredibly tough times but, at some point, we should start to get back on track and your business needs to be in good shape for whenever that may be.
“Making savings now could have cost ramifications when routes and school runs can again be operated and not having vehicles with any form of cover could prove a very expensive mistake. Whilst most of us are in lockdown, it would seem that vandals and arsonists are not.”