Risk Exposures and Insurance for Motor Vehicles (Private/Business) and Commercial Fleets

Due to government enforced lockdowns as a result of the COVID-19 pandemic, the Australian economy has contracted. Consequently, many domestic businesses and industries have closed or significantly reduced operations due to a decline in demand for goods and services. Whilst this is the case for some industries, there has been a rapid increase in demand for home deliveries and food supplies.

Individuals with private or business motor vehicles and organisations with commercial fleets should be aware of the new exposures which have emerged as a result of the pandemic. Consideration should be given to implementing and/or improving existing risk management controls to reduce impacts to motor vehicle assets.

Reduced Vehicle Utilisation
As many have been stood down and others are working from home, the utilisation of motor vehicles during this time has rapidly decreased, which in turn, directly links to reduced accident risks. However, the current environment has also created emerging exposures such as fire, theft and malicious damage exposure to idle vehicles, if they are not securely garaged on premises. Organisations operating commercial fleets who are experiencing severely reduced vehicle usage may be exposed to:
  • Accumulation exposures resulting from the concentration of idle vehicles parked in one location.

  • Security risks where many fleet vehicles cannot be parked securely on business premises.

  • Security of stock items held within idle vehicles parked off site.

  • Degradation of fuel in idle vehicles which may lead to engine damage.

  • Natural perils such as bushfires, hail, flood or storms can cause damage to idle vehicles parked off site.
Increased Vehicle Utilisation
In contrast to the above, those organisations operating motor fleets which have experienced a surge in demand for online deliveries, food supplies and other transport logistics need to reassess their current risk environment. Two major risks for these organisations would involve:
  1. Increased usage of vehicles which can also elevate accident risk exposure.

  2. Hygiene concerns where vehicles are continuously utilised by a number of drivers.
Global Impacts to Australian Drivers

The current pandemic has impacted on the global supply chain for vehicle parts. Where parts are required from overseas suppliers have been adversely affected by the pandemic, this in-turn can result in accident repairs and maintenance services being severely compromised through major delays.

Steps you can take:
  • Speak to Bellrock about assessing your current risks in this environment.

  • Ensure your coverage is adequate from the risks that may have emerged from this pandemic, having regard to your fleet.

  • Vehicles that are not being used should be kept in a secure location.

  • Ensure ongoing inspection, servicing and maintenance of your vehicles.

  • Ascertain whether opportunities exist for premium reductions as a result the current risk environment, they may do, particularly where vehicle usage has reduced.