Mike Smith, commercial motor technical manager at Norwich Union, said “From the claims we have come across, we have seen some devastating consequences as a result of fronting. The person being insured is usually a family member, often a 17 or 18-year-old son or daughter who has found it difficult or too expensive to take out their own insurance … Fronting, in most instances, will invalidate the company insurance policy, leaving the business to pay for any damage to their vehicle.”

Mike also commented on the safety of young drivers, other passengers and road users: “Sometimes the fronted vehicle is a high performance car and totally unsuited to the young driver’s experience, driving behaviour and attitude.”

Managers must be completely open with their insurance broker, and ensure they are aware of who owns and drives all vehicles insured on the business’s policy, to avoid invalidating their business insurance policy.

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Chris said: “Research shows businesses are putting themselves at risk to over £3billion of potential claims and liability costs and that many SMEs do not have adequate cover. In fact, 30 per cent of small businesses do not have any insurance.”

Chris expressed the importance of examining the policy regularly to ensure it still covers the business’ needs, as these can change over time and if the policy has been in place for a few years it could be that it no longer provides the cover needed.

“Seven out of 10 small firms would go out of business if they experienced a major emergency with over two-thirds having no contingency plans in place to deal with it.”

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