General insurers to soon provide motor cover to employees travelling in employer's vehicle

IMT-29, part of the Indian Motor Tariff, specifically addresses the situation where a private car owned by an employer is used to transport employees. This coverage is aimed at ensuring legal liability protection for employees who may be injured or face untimely death in accidents while using their employer's vehicles.

The Madras High Court emphasised the importance of making IMT-29 mandatory for employees travelling in private vehicles belonging to their employers. The court noted that in the event of accidents leading to injuries or fatalities, claimants often face significant challenges when seeking compensation from their employers.

This ruling was driven by the need to provide a safety net for employees who might lose their primary breadwinners or suffer injuries.

In response to the Madras High Court's ruling, IRDAI has issued the following directives:

Inclusion of IMT-29 coverage: All general insurers engaged in motor insurance must provide coverage to employees travelling in employer's vehicles, including paid drivers if applicable, under IMT-29 of the Indian Motor Tariff. This coverage is to be included as an in-built feature when issuing private car policies for such vehicles.

Inbuilt coverage: The compulsory inclusion of IMT-29 coverage will be incorporated under the Compulsory Motor Third Party Liability Section of Private Car Package/Bundled Policies and standalone policies insuring Compulsory Motor Third Party Liability.

No additional premium:  Importantly, IRDAI's circular specifies that no additional premium shall be charged for this coverage until further directions are issued.