Uninsured Loss Recovery Claims for Commercial Transport
Introduction
Following an accident, if your commercial vehicle is off the road you are losing money
Following an accident, if your commercial vehicle is off the road you are losing money due to:
1. the lost revenue, or
2. the cost of hiring an alternative vehicle, or
3. lost standing charges.
The first two may be claimed where you can prove you had no spare capacity in your fleet. You will only be compensated if you have actually incurred a loss. Therefore, if you have other vehicles and are able to rearrange your bookings to accommodate the damaged vehicle's contracts, then you do not have a loss and we may present a claim for the inconvenience of having a vehicle off the road.
HIRE
Prior to hiring an alternative vehicle you should consider the following:
- How long the repairs are likely to take?
- Will you mitigate your loss by hiring an alternative vehicle, (i.e. you have advance bookings or contracts to complete?)
Hire charges usually have to be settled immediately and the cost may be prohibitive. However, if your vehicle is likely to be off the road for some time it may be less expensive to hire than lose the revenue
The hire vehicle should be of the same specification as the vehicle damaged in the collision. The vehicle registration, tariff of hire, and specification (number of seats, size, etc...) should be indicated and most importantly, if the account has been settled please note this on the receipt.
If you need to hire another vehicle whilst yours is unusable, you are entitled to do so for a reasonable period. The difficulty with hire charges is that these can be for a substantial sum which you may initially have to pay for and if your claim should not succeed, for any reason, you will not recover them.
If you are hiring an alternative vehicle, it is essential that you ensure that your repairs are dealt with as quickly as reasonably possible. If there are any delays which could have been prevented, the third party insurers will not be responsible for additional charges caused by the delay. Most clients rely on their brokers to ensure that the repairs are carried out or an offer made as quickly as possible for the write-off value of the vehicle.
Please let us know if you would like Ashfords to put you in touch with a hire company specialising in commercial vehicles. Some companies may be able to offer you credit hire terms.
LOSS OF REVENUE
If you choose not to hire then you may present a claim for the lost revenue.
To present a claim Ashfords can help you work out the amount of daily revenue generated by your vehicle less the running deductions (see the loss of revenue calculation form). The revenue figure needs to be substantiated either by the actual bookings for the vehicle or from information supplied by an accountant. The daily gross revenue amount will be multiplied by the number of days the vehicle was off the road and then further by the utilisation rate
UTILISATION
We must prove how many days the vehicle would have been used during the loss period. The vehicle may be on a scheduled route or is contracted for use on a specified number of days per week. If your vehicle did not have advance bookings you may be able to supply copy day books which contain details of last-minute bookings. It is difficult to prove that these enquiries would have actually generated an income. Therefore the alternative would be to refer to the previous three months of bookings to confirm utilisation. If your business is seasonal then a comparison with the previous year's activity would be a more appropriate and legitimate assessment of the utilisation rate.
We will then adjust the actual number of days and will arrive at a loss amount.
SUMMARY
It may be difficult to decide whether it is worthwhile hiring an alternative vehicle or whether you claim for the loss of revenue whilst the vehicle is unavailable for use. If you have customers that rely on your specialised vehicles then hiring may not be a viable option.
Either method of claim needs to be supported by a proper calculation of the loss backed up with supporting documentation. When presented with an itemised and documented claim in this way, even the most difficult insurers will generally agree to make some payment although the precise amount may still be a matter of negotiation.
The Courts and insurers are reluctant to assess a notional loss of use figure, however, they are more inclined to make awards when presented with an itemised and provable calculation of financial loss. Recovery of a client's claim very much depends on the quality of the information supplied.
If you have any queries or require any additional information, please do not hesitate to contact your at Ashfords.
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Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.
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