Passenger liability: Your kids are not covered…….

Accident - anything can and also everywhere

What is passenger liability cover in your private vehicle insurance policy? It simply means coverage for you in the event your passenger(s) sue you or your authorised driver for having driven the car negligently, resulting in bodily injury, death or property damage. Passenger liability is therefore also known as legal liability to passengers.

Simple as it sounds, but lets examine the main section of the policy wordings that deal with passenger liability.

SECTION B – LIABILITY TO THIRD PARTIES

1. We will indemnify You or Your authorized driver for the amount which You or Your authorized driver are legally liable to pay (including claimants’costs and expenses) for:-

(a) death or bodily injury to any person except those specifically excluded under Exceptions to Section B,

(b) damage to property as a result of an accident arising out of the use of Your Vehicle

provided Your authorised driver also complies with all the terms and conditions of the policy that You are subject to.

Firstly, take a look at SECTION B of your motor insurance policy, which specifically deals with your potential liability to third parties, which, they can be your passengers. We have outlined the relevant sub-section 1 in the diagram. We do not think you will have any problem understanding those wordings.

Next, we look at the same section, on item 5 that deals with exclusions (or EXCEPTION) to SECTION B – here for simplicity, we have incorporated those exclusions that are of relevance to passengers. There are three main exceptions here.

5. EXCEPTIONS TO SECTION B

We will NOT pay for:

(a) death or bodily injury to any passenger being carried for hire or reward,

(b) death or bodily injury to any person where such death or injury arises out of and in the course of the employment of such person by You or by Your authorised driver,

(d) liability to any person who is a member of Your and/or Your authorized driver’s household who is a passenger in Your Vehicle unless he/she is required to be carried in or on Your Vehicle by reason of or in pursuance of his/her contract of employment with You and/or Your authorized driver and/or his/her employer,

Clearly the policy excludes risks of liability to passengers whom you (or your authorised driver) are carrying for hire or reward (a) – it is not difficult to understand, you cannot make a business out of a private vehicle.

So beware if YOUR KIDS ARE TRAVELLING TO SCHOOL IN A PRIVATE VAN LICENSED FOR PRIVATE USE ONLY! :evil:

Then there is this exclusion in your policy – NOT paying for claim if it involves someone under your employment (exclusion (b)).You or your authorised driver may unintentionally made a serious mistake causing injury to the third party who is your worker – the worker sues you but the policy’s liability is not going to respond. Meaning, you would have to deal with the liability yourself. Point to note here, don’t think about “passengers” when reading this exclusion (b), you would probably get even more confuse – just think about your gardener, your maid…… Yes! we agree with you, that this piece here is abit badly written! That is why you have Malaysia Insurance Online!

Another one of those exceptions in exclusion (d) can be a real stumbling block to a claim involving a member of your households (usually relates to your family members, which may include those from your wife’s side staying under the same roof). They can sue you but your policy is not going to respond unless, they are at time of the accident were passengers carried under employment by you…….

Endorsement 100 – Exclusion of Legal Liability to Passengers (Private Car only)

The cover provided under Section B1(a) of this Policy shall not apply to death of or bodily injury to any person being carried in or upon or entering or getting on to or alighting from Your Vehicle (other than a passenger required to be carried in or on Your Vehicle by reason of his/her contract of employment with You and/or Your authorised driver and/or his/her employer).

Subject otherwise to the Terms and Conditions of this Policy.

Better use a trishaw to carry your girlfriend if without passenger liability!


While having said what was said here, things do not end just like that…. If you can check your policy SCHEDULE (forming a part of the insurance policy), the page that show the details of your vehicle, including the premium that you had paid, you would have noticed some small wordings, “Endorsement 100” or “E 100″. Closer examination of the clause wording (check the diagram box above) – Your policy obviously does NOT cover any of your legal liability to your passengers unless the passengers are in part of an employment with you…. So, it is not difficult to imagine; your GIRL FRIENDS suing your for negligent driving is NOT covered.

“Thinking about buying PASSENGER LIABILITY?”

EXTENDING PASSENGER LIABILITY :lol:

What you can do is request your agents or insurer’s representative to have Endorsement 100 deleted from the policy. After the deletion, which of course you need to pay some money first (not free lunch….) your liability to your passengers would be covered. Notwithstanding, don’t get too excited…. 8-O Your FAMILY MEMBERS are still NOT covered! Simply because the employment relationship with you is almost not likely in most circumstances….

THE PROBLEM WITH HOUSEHOLDS MEMBERS :oops:

Other than buying Personal Accident for your households’ members, there is really no provision in the Motor Insurance tariff in respect of legal liability to them while being carried by you as passengers. The only good answer we have for you is “BERHATI-HATI DI ATAS JALANRAYA” while your FAMILY MEMBERS ARE ONBOARD!

What do you think? Or you have a better way of dealing with this that we do not know? Please do share with us.



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29 comments for “Passenger liability: Your kids are not covered…….

  1. Siew Keng Mun
    May 23, 2012 at 21:55

    Are bus insurance under third party coverage has passenger liability to cover its passengers?

    • May 29, 2012 at 22:29

      In the normal course of purchasing insurance, passenger liability is part of the bus insurance

  2. January 14, 2012 at 12:08

    Its such as you read my mind! You seem to know so much about this, like you wrote the guide in it or something. I feel that you just could do with some p.c. to power the message house a bit, however instead of that, this is wonderful blog. A fantastic read. I’ll definitely be back.

  3. Philadelphia Personal Injury Lawyer - Anthony Gagliano Law
    October 29, 2011 at 02:22

    I am no longer certain the place you are getting your information, but great topic. I must spend some time studying much more or figuring out more. Thank you for great information I was searching for this info for my mission.

  4. October 16, 2011 at 21:35
  5. Anonymous
    October 4, 2011 at 21:06

    Hi, I was not told by my agent about the endorsement 100 which was automatically added into my policy. What does this endorsement do to my cover and if I decide to extend passenger liability would they delete this endorsement 100? If the insurance co. delete the endorsement 100 to what extent would my passengers be covered?
    please let me know how can i ensure my liability to my passengers can be covered after the extension.

    • October 9, 2011 at 11:33

      I am going to write about this and would post it sometimes next week, hope you can continue to follow…

  6. Anonymous
    September 15, 2011 at 10:14

    Hi! Malaysia insurance online, this post already been read more than 1600 times. And still my household members are not covered. Time for those insurance jack-asses to do something! Anything done?

    • September 16, 2011 at 19:18

      Guess, the industry is still slow towards being friendly and use plain language in their policy wordings….

  7. LKK
    July 16, 2011 at 20:54

    How can get my kids to be covered?

    • Andrew Wong
      July 18, 2011 at 20:47

      To purchase a Motorist PA that covers the driver and passengers. This is essentially a PA attaching to the car. Common-Law liability is still not covered.

      • July 24, 2011 at 19:56

        I guess we need to break out from the conventional thinking and start looking at legal liability for all passengers, be they household members, employees or third party. If we want to move as a developed country it is important that we start reexamining our mindset. Of course customers must be prepare to pay for the additional….

  8. andrewwong
    July 2, 2011 at 20:16

    Would like to sum up this Legal Liability to Passengers issue as follows:-

    1. Endt. 100 exclude cover to any passengers. However, if the passenger is carried by reason of or in pursuance of contract of employment at the material time of the accident (meaning Insured’s staff), then that passenger is covered in that when he sues the Insured, the policy will response. Must be in pursuane of contract of employment at time of accident.

    2. When you delete Endt. 100, all passengers are covered except:-

    a. Passengers being carried for hire or reward.
    d. Passengers who is a member of the Insured’s household and this include live-in maid. Again, if the household member is in the employ of the Insured and were travelling in pursuance of their contract of employment at the material time of the accident, the policy will response should the passenger takes legal action against the Insured in the event of an accident.

    Exception to Sect. B (b) has nothing to do with passengers. It merely said that death of injury arises out of and in the course of employment by the Insured is not covered. ~ An example would be when the mechanic repairing the car (which arises out of and in the course of the employment of the Insured) and was accidentally splashed by hot water from the radiator. Then such T/party claim is excluded. ~ These are my views after closely going through the policy. Any comments and discussions are welcome.

    • July 4, 2011 at 10:07

      Andrew,
      Since you have the interest and technical know-how, why not join us to work on the industry PLAIN LANGUAGE MOTOR POLICY WORDINGS? If you are okay to this, then we will email to you personally….

      • andrewwong
        July 4, 2011 at 13:21

        TQ for the invite and really feel honorable. As policy analysing consumes quite abit of time and usually the enquirer is impatient for a quick answer am afraid might not be able to deliver in fair timing; at least not for now. But speaking of PLAIN LANGUAGE MOTOR POLICY WORDINGS, I thought the industry has made amendment sometime ago. But apparently `not well done’. Didn’t know you guys are in the process of doing this now. Finally, I’m okay to receiving emails from you.

        • July 10, 2011 at 22:51

          The plain language motor insurance policy wordings project is a requirement set by the Central bank, so it is a no choice for the insurance industry but no one wants to get this done….

  9. victim
    April 11, 2011 at 09:38

    My car driven by my friend carrying his friends involve in an accident. Can the passenger take legal action against me. My insurance company said my policy does not cover the passsenger and asked me to appoint my own lawyer.

    • April 16, 2011 at 11:37

      It is usual for your private car policy to have a standard passenger liability (you and your driver’s legal liability to passengers) exclusion. Supposed you did not extend this cover… You driver was supposedly negligent causing injury to the passengers carried and these passengers are NOT being carried in the course of employment of you or your driver…. they, the passengers can sue you and your driver BUT you are likely to be let off if there is NO vicarious liability on your part. By saying vicarious, meaning you did not ask the said driver to drive those passengers and the driver has no relationship (i.e. workers… family members….) with you….. it is likely you should be let off by the courts. But then you have to appoint a lawyer if there is a legal suit against you….

    • Anonymous
      April 17, 2011 at 21:32

      Unfortunately the laws here recognise you as the owner of the vehicle and you having authorised the driver to drive. Whatever happens, you would be dragged to courts. The worst part when someones sue, you would have to incur legal fees win or lose. Why not in future consider a PERSONAL LIABILITY INSURANCE, but beware some may even exclude motor vehicle related liabilities.

      • April 18, 2011 at 12:44

        No comment but supposed is a reasonable good suggestion if you do not mind paying some money for such cover…

  10. Anonymous
    February 21, 2011 at 22:21

    This baffles me.

    Firstly the Endt 100 on my Policy reads different.

    Even assuming we use yours.(I am yet to sight the Tariff Wording).

    It is my understanding that Endt 100 purports to ammend Insuring Clause B1(a). Hence the exception to the class of persons referred to in B1(a) dont apply. Therefore Endt 100 states that there is absolutely no passenger cover unless the particular person is being carried in the pursuance of the passangers employment with the Policy Holder or the authrorised driver.

    By deleting Endt 100 – there is no cover for passangers in the course of employment with the Policyholder + all the exception in Exception 5.

    With regards to the bar of cover for household members – I suspect it has something to do with the English common law principle of inter-spousal immunity – though I am not sure if it is still good law in malaysia.

    Cheers,

    Deva

  11. December 20, 2010 at 20:20

    What a great post on online business liability insurance! Seriously, some of your best work. I can’t argue with one word of it, and I just subscribed to your feed. In the future, how about a post on ANCHOR_TEXT%? Cheers!

  12. August 30, 2010 at 00:16

    Is it so? What are the remedies or options to cover?

  13. August 22, 2010 at 14:28

    Wow! I did not know my family is not covered in the passenger liability extension coverage. So complicated meh?

  14. August 17, 2010 at 16:13

    [New Post] Passenger liability: Your kids are not covered……. – via #twitoaster http://www.malaysiainsurance.info/?p=403

  15. August 17, 2010 at 16:13

    [New Post] Passenger liability: Your kids are not covered……. – via #twitoaster http://www.malaysiainsurance.info/?p=403

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