 "Irdai mandates TP insurance to employees travelling in employer's vehicle")
Insurance Regulatory and Development Authority of India (Irdai) has told insurance companies providing motor insurance to compulsorily include an inbuilt feature in the Third Party policy (TP) that will give coverage to employees who travel in their employer's vehicle.
IRDAI also added that no additional premium will be charged until further directions are issued. This applies when issuing third-party insurance as per the IMT-29 of the Indian Motor Tariff and when issuing insurance to private car policies for such vehicles.
The insurance coverage will be provided as an inbuilt feature under the compulsory Motor Third Party Liability Section of Private Car Package or Bundled Policies and under standalone policies insuring Compulsory Motor Third Party Liability, the regulator added.
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The decision comes in the backdrop of the Madras High Court's directions to the insurance regulator on making IMT-29 mandatory as an inbuilt feature for employees. This directive was issued after the court observed that it becomes a nightmare for claimants to recover compensation from the employer of employees who meet with an accident and either get injured or face untimely death while travelling in the private vehicles of their employers. This leads claimants to suffer endlessly, having lost their sole breadwinner or having sustained injuries.
The Indian Motor Tariff 2002, Clause 7 of Section 2, addresses a situation where a private car owned by an employer, which is used to carry employees, gets involved in an accident. According to the clause, the liability of such employees, including the paid driver if applicable, should be covered on payment of an additional premium of Rs 50 per employee. The number of such individuals should not exceed the maximum licensed seating capacity of the vehicle. The additional premium of Rs 50 per employee is net, irrespective of any period of insurance not exceeding 12 months.