Co-Worker, Ferrari and Work Van

I have a co-worker in the office who does a delivery job on the side for some extra income. I believe he has an appointment with a lawyer coming up in regards to the below issue however for my own curiosity and to see if I can give him any tips I thought I'd ask the question here.

  • Co-worker was working on an ABN for a delivery company.
  • The delivery company provides the work van.
  • Co-worker backs into a Ferrari.
  • Delivery Company refuses to lodge an insurance claim.
  • Ferrari owner's insurance company "Dawes Insurance" sends him a "Notice of Intention to Sue" for the sum of $48,000.

Is the delivery company obligated to lodge an at-fault insurance claim for the ABN worker?

(Also, I have always thought third party property damage should be compulsory in Australia!)

Comments

  • +1 vote

    The delivery company provides the work van.

    What was the arrangement for insurance liability on signing contract?

    •  

      Not sure, will have to ask him.

      So because he was working on an ABN if the contract did not state anything about insurance liability then the onus of car insurance coverage would be on the ABN worker?

      • +2 votes

        I'm probably not qualified to answer that question but it'll be interesting to see what the contract says.

        •  

          but it'll be interesting to see what the contract says.

          Sure will. Most contracts of these types trying to make people out as contractors for your business have clauses around insurance in there and they are usually very much in the vein of "You are not an employee or represent our business so make sure you get your insurance and if you don't have adequate insurance and something happens, we'll distance ourselves so quickly from your we'll cause a king tide."

  •  

    This link might provide some clarification depending on whether he's classified as a contractor or employee.

    …. for the sum of $48,000.

    That's probably just for the licence plate holder at the front! lol

    •  

      That's probably just for the licence plate holder at the front! lol

      At that price probably a written off license plate holder that was rebuilt. A brand new one would be way more exxy.

    •  

      Working on an ABN sounds an awful lot like a contractor. However using a work van it sounds particularly grey when it comes to at fault insurance claims.

  •  

    Anyone for popcorn?

  • +3 votes

    Is the delivery company obligated to lodge an at-fault insurance claim for the ABN worker?

    In short, no. No one is ever obligated to lodge an insurance claim.

    Now, the real question is going to be whether or not the co-worker can hold the delivery company vicariously liable in this situation.

    The argument (with some simplification) will turn on whether the person was acting as an employee of the delivery company, or whether the person (noting they were working under ABN) effectively "rented" the vehicle from the delivery company in a business capacity.

    If the legal proceedings go ahead, your colleague will need to either successfully argue they are not liable to the Ferrari owner, or if unsuccessful in that endeavour would need to launch separate proceedings against the delivery company to recover the costs.

    Note, the above has nothing to do with insurance directly. The delivery company is either liable or they aren't. If they are, they can choose to make an insurance claim or not. The existence (or not) of any insurance does not create a liability.

  • +2 votes

    Classing the worker as a contractor in this instance is of concern given the worker is not supplying their "own tools of trade". Could be deemed a sham contracting arrangement by FWA. What is stated in the contract I would think to be almost irrelevant.

    This arrangement by its very nature is implemented to mitigate risk from the company to the worker which is not always legal.

  •  

    Dumb and dumber

    /popcorn

  •  

    Regardless, it's never a good idea to run into an expensive vehicle.

  •  

    If Delivery Company refuses to lodge an insurance claim, does it mean they have no insurance?

    •  

      Insurance merely gives you options, and the delivery company is under no obligation to claim on it. Does not equate to being uninsured.

      •  

        I wouldn't lend someone a vehicle if an insurance can not be claimed under any obligation. Headaches for all parties.

        •  

          Me neither!

  • +1 vote

    Remember companies do not want their premiums to increase and insurance companies do not like paying out, so both will make it hard to resolve and cost you money.

    See a lawyer and see if you can get away with a response that the van is owned by XYZ Company and as such insurance details can be obtained from XZY. If the company wants to play hard ball then pass their details onto the Ferrari lawyers/owner and see what happens. In the mean time read the contract and get the lawyer more involved, aka spend more $$$ to get out of paying the $48K.

    Hopefully there were three quotes supplied?

    •  

      No idea about quotes.

      But thanks for the insight.

      My co-worker is following this thread carefully before he meets with the lawyer.

  • +1 vote

    I can't see how the delivery company would expect the contractor to insure the delivery companies van while he is delivering on behalf of them.

    I know that when my kids had to insure the Honda that they use but is registered in my name it required me to give written permission to the insurance company for them to do so.

    Where I work, if one of our consultants (generally ABN holders) use a company vehicle, the firm provides a comprehensively insured, registered, properly maintained and roadworthy vehicle.

    If the consultant uses their own vehicle for company purposes they have to sign off that their vehicle is comprehensively insured, registered, properly maintained and roadworthy and that if they are involved in an accident they are responsible for any legal issues and the excess. (Basically we try and dissuade them from using their own vehicle and take a hire car at our cost if no company vehicle is available).

    Your mate needs to read and understand his contract and possibly seek legal advice. It's likely that what has to be done is that he advises the other insurance company that he isn't the owner of the vehicle and they need to seek redress from the owner. If the owner of the van thinks their hired driver is at fault then they will need to seek redress from him after they have sorted out the Ferrari repair.

    •  

      I think there is no actual written contract. Just a cowboy style contractor/employer relationship.

  • +1 vote

    In this country it is typical to insure the vehicle, but blame the driver when something goes wrong. Driver gets a fine, vehicles insurance covers the damage (except on most posts on ozbargain where the vehicle is not insured) Is the company also saying the driver is also responsible for the damage to the van?

    What sort of insurance would you need to obtain to cover you as a driver of someone else’s vehicle/s, either for commercial use or private? I’ve never heard of a personal liability insurance that covers vehicles.