Norwich Union warns business owners about fronting
Norwich Union has recently warned that some directors and company owners are invalidating their business insurance policy, as well as putting their children at risk, by fronting. (Fronting is the term used for managers or directors using the business’s policy to insure a person not directly connected to the company.)
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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