NSW Employee Hit & Run insurance claim liability

[Amelia Cruz]

Hi all,


I am the registered director for a Pty Ltd company. It was a very small business with only myself driver a courier van, the van is the only asset registered under the company name. I have stopped running the business since August 2018 (but hasn’t close the company with ASIC) and closed the company bank account.


Back in June 2018, I hired a driver (sole trader but he has never provided me ABN so I ended up paid him cash in hand) for just 3 weeks. This driver crashed a café pagola. When the incident happened, we dealed with the café owner and the driver in good faith, offer the driver continue work to pay off the $6000 claim from the café. Anyhow, the driver disappeared and police was involved back in that time.


Now more than 6 months later, we received a letter hand delivered by NRMA, claiming $6000 payment for the café owner’s insurance claim. Instead of addressing the letter to the company name, it was addressed to my name, and the letter said “We are now holding YOU liable for all the payment due” and only provided 2 weeks’ time for payment. As mentioned, I am not running the business anymore and there is basically $0 under the company and the probably $10k worth Hyundai iload is the only asset belongs to the company.


I do know my right as a director of a Pty Ltd is that as long as I made all the payment for ASIC and did everything legally, I should not be liable for any company debt. I don’t understand why NRMA will make myself liable in first place. There is no way I will be able to pay the $6000.


I would like to know what my position is in this matter. Should I transfer the van to someone else’s name ASAP so it no longer be part of the company asset and apply for liquidation/close the company? I don’t need the company anymore so there won’t be any loss for me to do so. However, I would like to know what are my chances if I go ahead to do this, does that means I will no longer be liable for the $6000?


Please advise, thanks.

 

[Zerojay]

Was the vehicle not insured for third party damage?

 

[Amelia Cruz]

Was the vehicle not insured for third party damage?

Hi Zerojay,

Well, it was insured when the accident happened in June last year. But the business has since stopped running, i.e. the van has been parked since August and from there I cancelled the insurance policy, didn't expect the accident matter to come back after 2 months as the cafe owner told us not to worry a thing at that time.

 

[Zerojay]

So you were covered at the time of the incident. It does not matter that you have since cancelled the policy or that you did not claim promptly. You can still lodge a claim now and your policy should cover your company for any damage caused by authorized drivers even if he has since gone missing. You will have to pay the excess of course.

I do not give legal advice, just my opinion based on working for an insurance company for over 20 years.

 

[Amelia Cruz]

So you were covered at the time of the incident. It does not matter that you have since cancelled the policy or that you did not claim promptly. You can still lodge a claim now and your policy should cover your company for any damage caused by authorized drivers even if he has since gone missing. You will have to pay the excess of course.

I do not give legal advice, just my opinion based on working for an insurance company for over 20 years.

The company is not running at all. Basically it’s insolvency at the moment. There is no way I or the company can pay $6000 or any excess.

 

[Zerojay]

Your insurer should pay $6000 less the policy excess direct to NRMA and leave it to you to negotiate with NRMA for the amount of the excess. If your company can’t pay anything there is a good chance NRMA will be satisfied with what they have recovered and not take further action against you.