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!
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.
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
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…. 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
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.