Miss T Says: “You Need Passenger Liability Cover Because …”

What is passenger liability cover?

Passenger Liability Insurance protects your taxi business in instances where you, or your driver are found to be at fault, in terms of the law, for the injury or death of passengers that were being transported in your business vehicle. 

The amount of cover is usually set at R5million and is normally included in your Comprehensive Vehicle Policy at no extra charge. You are able to increase this amount at a small cost and you are also able to take it as a stand-alone policy if you only have 3rd Party or 3rd Party Fire & Theft cover. 

Passenger liability should also not be confused with public liability. Passenger liability provides insurance against any claims that may arise while a passenger is in the vehicle, whether moving or stationary. Public liability only comes into effect when the passenger is outside of the vehicle.

Is passenger liability insurance compulsory for a taxi business?

In South Africa, the need for passenger liability insurance has often been debated due to the existence of the Road Accident Fund (RAF). The RAF is a state-supported insurance fund that provides cover for injury and loss of income to all road users in South Africa in the event of a road accident. 

The Road Accident Fund Act also prevents an injured person or his or her dependents from suing the driver or owner of the vehicle that was responsible for the accident.  Without engaging in a legal process, the owner or driver cannot be held liable for the injury; therefore, there can be no claim against passenger liability insurance. The Act also states that, should the RAF go insolvent, the injured party’s right to sue will be reinstated.

Even after the RAF, there are still two ways that taxi operators or other businesses can be held legally liable for someone’s injury:

  1. If the RAF is unable to pay the claim; and
  2. If the claim is for secondary emotional shock. Secondary emotional shock is when the person who claims was not involved in the accident but either witnessed or heard of the accident. In this instance, the RAF excludes these claims. 

What other types of insurance should businesses that transport people consider?

If a business or individual considers using a vehicle as a full-time or part-time taxi to transport people from one place to another be it a school, a tourist destination or even from one location to another, the driver needs to be correctly licensed according to the regulations of the province in which he or she drives – with the added necessity of having the proper passenger liability in place.

It’s important to remember that your insurance policy will not cover you if you, or your driver is carrying more passengers in the vehicle than it’s built or licensed to carry. This means that if a vehicle is licensed to carry five people and a post-accident investigation finds there were six or more occupants in the vehicle at the time of the accident, your claim will not be paid out.

Call Thembela today on 087 233 8771 or Whatsapp her on 062 169 4878 to find out more about passenger liability cover and to see if she can source you a better quote for your insurance.

* This article is provided for informational purposes only and should not be construed as legal or financial advice. 

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