Employer Making Drivers Pay Insurance Excess

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Justin M

15 July 2014
This is in a small business where none of the managers have formal qualifications. The employer has asked all the delivery drivers to sign to say they agree paying the excess of an at-fault motor vehicle accident. The drivers mainly do local deliveries in utes or small trucks. In addition to this is that the excess is $2500.

I believe that this is so high due to the drivers being below 25. If the company only employs drivers below 25 and expects them to pay, should they not pay more for their insurance to cover under 25 drivers? The company is pretty much trying to reduce the money coming out of their pocket and making employees pay more.


Hi Justin,

As to whether it is legal for employers to require employee drivers to pay an excess on their insurance, may vary slightly from state to state. However, as a guide, the NSW Law Assist website provides as follows on this issue:

"An employee who causes an accident while they are driving for work may be responsible for the damage caused to their employer's car.

If the employer's car is insured and the employer claims on that insurance policy, the employer's insurance company can't then claim against the employee for the amount they paid to the employer for the claim.

If the employer has to pay an excess to the insurance company, they may, in some circumstances, be able to claim it back from the employee.

If your employer is asking you to pay their excess, you should get legal advice."

It will vary from case to case because it may depend on how and why you were using your employer's vehicle at the time of an accident and whether you had their permission to be using it for that purpose.

Generally speaking, i doubt there is anything preventing your employer from getting you to agree to pay the excess if you have an accident that is your fault. The high amount of the excess is something you would have to speak/negotiate with your employer.

Hope that helps.

Owens Lawyers

Well-Known Member
13 June 2014
All I would add to what @Sophea has said above is that there are restrictions in the NES from deducting amounts from employees wages unless it is agreed and in their interests, or allowed in an EA or Award. So while the excess may be payable by a particular employee, the employer may not be able to take payment from wages.

Of course if employees don't like the condition they don't have to enter into a contract of employment, but if jobs are scarce then they may feel they have little choice. If there is a union relevant to the drivers (TWU maybe) then maybe contact could be made and the issue raised with them.
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3 December 2015
Hi, I was wondering whether you can provide a case law to support the suggestion that an employer could require an employee to repay the excess for an at fault accident.

Kind Regards