IRDAI asks general insurers to provide cover to employees travelling in employer's vehicle

The Insurance Regulatory and Development Authority of India (Irdai) has asked general insurers to provide cover to employees travelling in employers' vehicles. The move comes after the Madras High Court directed Irdai to make IMT-29 compulsory as an in-built coverage for employees while issuing a private car policy for such vehicles.

IMT-29 Compulsory Coverage

IMT stands for India Motor Tariff. According to the circular issued by Irdai, all general insurers carrying on motor insurance business shall provide the cover to employees travelling in an employer's vehicle, including a paid driver, if applicable, under IMT-29 of the Indian Motor Tariff, compulsorily as an in-built coverage while issuing a private car policy for such vehicles.

In-Built Coverage

Irdai further said that the compulsory cover of IMT-29 should be provided as an in-built coverage under the Compulsory Motor Third Party Liability Section of Private Car Package/ Bundled Policies and under standalone policies insuring Compulsory Motor Third Party Liability.

No Additional Premium

The regulator also added that no additional premium should be charged for the compulsory cover until further directions.

Background

The Madras High Court had said that it becomes a nightmare for claimants to recover compensation in cases where an employee meets with an accident - leading to severe injuries, or death - while travelling in an employer's vehicle. This leads to claimants' endless suffering, the court had said.

The decision by Irdai to make IMT-29 compulsory coverage for employees travelling in employers' vehicles is a welcome move. It will provide much-needed protection to employees and their families in the event of an accident.