Director and business owners especially of vans have been warned against adding young relatives to their company’s motor insurance policy, a practice which is known as ‘fronting.’ Norwich Union stated that fronting was an “increasing problem” in commercial motor insurance, and it could even invalidate cover. It may also in extreme circumstances end up putting the lives of younger drivers in danger.

Norwich Union commented: “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.  Although this may seem as though they are doing that family member a good turn by saving them some money, and the credit crunch may make this appear even more financially attractive, the risks to both the company and that young driver are substantial. Fronting, in most instances, will invalidate the company insurance policy, leaving the business to pay for any damage to their vehicle.”

Liability cost

The Union further added: “ Also, if any other driver is involved in an accident, while the insurer will be required to meet any liability cost under the Road Traffic Act, they can seek recovery of any such payments from the policyholder." It also labelled the practice: “Totally unsuited”.

Norwich Union explained that it was just not money that was at stake, but also the safety of the young drivers, other ride users and any passengers that are in the vehicle with the driver at the time: “Sometimes the fronted vehicle is a high performance car and totally unsuited to the young driver's experience, driving behaviour and attitude. To avoid any insurance cover problems, fleet managers need to be open and up-front with their broker and insurer, and ensure they are aware of who owns and drives all vehicles insured on the company policy.”

Check policy and don't "front"

There is also specific concern that brokers should ensure that fleet managers should carefully read and review their company policy: “Brokers should ensure that fleet managers review company policy on who can drive company vehicles for social, domestic and pleasure use, including age of driver, and ensure adequate controls are in place including licence checking.”

Norwich Union described how although ‘fronting’ is normally a car issue, it has increased to van drivers: “Although fronting has largely been a car issue, vans are becoming increasingly popular amongst young people for the extra space they provide for sports equipment. Whether for car or van, the true cost of fronting can be devastating.”

According to the Department for Transport statistics have shown that four people are killed or seriously injured in crashes involving young drivers every day in Great Britain. It has also been exposed that 17 to 20 year old male drivers are nearly ten times more likely to be killed or seriously injured than more experienced older drivers.