Third Party Insurance

Part VI of the Road Traffic Act 2008 stipulates that third party insurance is required for all vehicles on the road. HMRC

has Crown Exemption from this Act, which entitles HMRC to self-insure for all vehicle business use. However, this exemption does not allow for the self-insurance of:

1. Private usage of vehicles under HMRC's Company Car Scheme (ACS and ACS Lite).

Certain job roles within HMRC allow for a company car whereby the driver pays 3/8s of the associated costs and Benefit in Kind Tax so that they have the benefit of being able to drive the vehicle for private mileage. They are also allowed to nominate 2 Friends and Family as drivers.

2. HMRC vehicles travelling on HMRC business on roads within EU Member States.

The Fraud Investigation Service (FIS) is responsible for the Department's civil and criminal investigations into the most serious fraud and wrongdoing. They use a wide range of powers and approaches to protect UK funding for public services by investigating the most harmful tax cheats.

The Risk & Intelligence Service (RIS) is responsible for understanding and managing the risks to the UK tax system by gathering information and intelligence, which is then fed to FI for investigation and analysed to assess the risks and threats to the UK tax system.

In order to carry out these responsibilities, Officers from FIS and RIS are sometimes required to travel on EU roads, which includes attending UK Customs Sheds housed within France.

HMRC used to have exemption from the requirement of Third Party Vehicle Insurance and to self-insure under EU Directive 72/166/CEE (as amended) However, since 1st January 2021 and BREXIT, the exemption was withdrawn. This has meant that each HMRC Vehicle that travels on EU roads must now hold a valid Green Card and, as there is no equivalent Crown exemption for this, HMRC have no option than to hold a valid Vehicle Insurance Policy for travel on EU roads.

This contract is therefore required to cover the insurance of:

1. The private mileage element of the HMRC Company Car Schemed including: HMRC Drivers; their nominated Friends & Family; and any replacement Courtesy / Hire cars to cover downtime; and
2. Third Party costs where HMRC Operational vehicles are involved in road traffic accidents on EU Roads.

Without a compliant Third Party Vehicle Insurance contract, HMRC would be left without a valid insurance policy, contrary to the Road Traffic Act 2008 and EU Law.

The current contract is a 1 year extension of a Third Party & Associated Services contract with Willis Towers Watson.

The current Third Party Insurer is RMP with Gallagher Basset as the Claims Handler. The current insurance policy is a Long Term Agreement (LTA), which saw reduced premiums over a three year period.

The current insurance cover started on 01/05/2021.

The new Contracted supplier will be require to take over the current 3 year agreement wiith RMP and Gallagher Basset, as well as being responsible for quality assurance, market information, as required, and best practice etc. Should this contract move into the 1 + 1 Year formal extension/s and, due to the LTA on the insurance Policy, the winner of the tender may, or may not have to undertake a market exercise after the 2 year contract term