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Top 5 Insurance Pitfalls for Driving Instructors and How to Avoid Them

April 7, 20142 Comments

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Becoming an ADI is a long process, but a worthwhile one! But what you don’t want to do once you’ve reached the end of your journey and are about to take your career to the next level is to make a mistake on your paperwork. Insurance is a key part of your business, and without the right cover you could quickly find yourself in hot water, both legally and financially. So here are our top five insurance pitfalls for driving instructors, and how to avoid them.

#1 – Dual control cover

A dual control vehicle is pretty much an essential for driving instructors. It gives you a greater degree of control over the vehicle should your novice driver make a mistake. But having dual controls fitted to your car means that insurance agencies will regard you as having ‘modified’ the vehicle, and in most instances will not provide cover.

Avoid this pitfall by: looking for specialist dual control vehicle insurance.

#2 – Personal liability cover

Taking out personal liability insurance means that if a person (and that could be a pupil or a member of the public) is injured as a result of your actions whilst you are working and decides to sue you personally for compensation, you are covered financially. Personal injury claims can run into thousands of pounds, even for relatively minor injuries. Could you afford to pay that compensation, as well as the court costs and legal fees, out of your own pocket?

Avoid this pitfall by: making sure you have adequate personal liability cover that will protect you financially in the event of a financial claim against you.

#3 – Loss of earnings

Your vehicle is, quite literally, your office. It’s the main tool of your trade (apart from your skill as an instructor, of course!) and it’s your primary source of income. If your vehicle is off the road for even a short while it can make a huge impact on your earnings. Lessons have to be cancelled, fees are lost and your reputation as a reliable, dependable instructor can also take a hit, affecting your net income over a longer period of time.

Avoid this pitfall by: taking out ‘loss of earnings’ cover that will protect you financially and keep the money coming in whilst you make alternative arrangements. Another tip is to look for an insurance package that will provide you with a hire dual-control car whilst your own vehicle is off the road.

#4 – Normal ‘comprehensive car’ insurance

Don’t be fooled into thinking that ‘fully comprehensive’ car insurance will cover you for teaching people to drive. Look on the document and you will see that cover is usually classified for ‘domestic and pleasure’ use only. In some cases, ordinary car insurance won’t even cover your daily commute to work and back! If you use your vehicle for work and your insurance doesn’t cover you for this, then because you have broken the terms of your insurance contract it could mean that you are effectively driving whilst uninsured. This could result in a criminal record and a fine, which if you’re newly qualified could put your ADI licence in jeopardy.

Avoid this pitfall by: taking out proper driving instructor insurance, rather than just normal comprehensive car insurance.

#5 – Employer’s Liability insurance

If you run a driving school and employ others, even if those people are sub-contracted or part-time, you must by law have employer’s liability insurance. Don’t be fooled into thinking that this only applies if you are employing people full time and on PAYE. Your policy must provide at least £5million in cover and be provided by an authorised insurer.

Failure to have the correct EL insurance could lead to prosecution and a fine. It also means that if an employee is injured whilst working for you, they could sue you personally for financial compensation.

Avoid this pitfall by: taking out employer’s liability cover as soon as you employ anyone, even if they are sub-contracted or part-time.

Marc Loud is a partner at Park Insurance, insurance brokers for over 30 years who cover a range of specialist sectors including driving school insurance.

Filed in: InsuranceYour Blog

  • Nicky

    I have just read your blog regarding driving instructors insurance. My other instructors are self employed and work under franchise with my school. Does this mean I need employers liability insurance?
    If you can email the answer I would be very grateful.
    Many thanks


  • Marc Loud (Park Insurance)

    The above comment is correct which means Nicky you do not need Employers Liability.

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