IRDAI Mandates Motor Cover For Employees In Employer's Vehicle

The Insurance Regulatory and Development Authority of India (IRDAI) has mandated that general insurers must provide obligatory motor insurance coverage to employees using their employer's vehicles. This directive comes in response to a Madras High Court ruling, urging the inclusion of India Motor Tariff-29 as an integral component when issuing private car policies for such instances.

According to IRDAI, all general insurers involved in motor insurance are obligated to offer this coverage under IMT-29 of the Indian Motor Tariff, without any extra charge. 

This provision should be included in the Compulsory Motor Third Party Liability Section of Private Car Package/Bundled Policies, as well as in standalone policies covering Compulsory Motor Third Party Liability.

The Madras High Court emphasised that in cases where employees sustain injuries or fatalities in accidents involving their employer's private vehicles, recovering compensation can be a daunting task. IRDAI cited this as a significant factor in their decision.

Furthermore, IRDAI clarified that Indian Motor Tariff 2002, under Clause 7 of Section 2, outlines a scenario where a private car owned by an employer, used for transporting employees, is involved in an accident. 

This clause specifies that the liability of such employees, including any paid drivers, should be covered by paying an additional premium of Rs 50 per employee. This premium remains consistent regardless of the insurance period, not exceeding 12 months.

As of now, no additional premium should be levied, pending further instructions.