If you’re a risk manager, safety officer, or a company stakeholder, you know the business liability exposure for company vehicles inside and out. You regulate and maintain your fleet and your drivers daily, and do everything you can to avoid being part of the more than 7 million auto accidents that occur in the U.S. every year.
But your liability may not end with your company fleet. If your business allows employees to use personal vehicles to conduct business, even only occasionally, you might be exposing your company to additional risk. Here are six areas to consider so your company can mitigate risk and better protect your employees and company.
1. Establish hiring guidelines
Limiting your company’s liability begins with establishing clear hiring practices. Just as you would for employees driving company vehicles, make sure employees who will drive personal vehicles on the job have valid driver’s licenses. For every driver, obtain a motor vehicle record (MVR) to review accidents, infringements, and other behind-the-wheel behaviors. Evaluate MVRs annually and confirm that all employees driving personal cars continue to maintain good driving records. If employees are found exhibiting unsafe behaviors, take whatever measures you feel are appropriate—including training, suspension, or even dismissal.
2. Clarify expectations for drivers
Require employees who are driving personal automobiles for business purposes to sign vehicle use agreements. This document should describe your expectations for employees while they are behind the wheel. For example, employees should agree to:
- Abide by all state and local laws and regulations pertaining to vehicle operation;
- Refrain from activities that could lead to distracted driving, including the use of mobile phones; and
- Never consume alcohol or illicit substances during work hours.
The consequences for disobeying the agreement’s guidelines should be outlined as well. And remember to review and update these agreements regularly—and then obtain new signatures after staff review the revised agreement.
3. Evaluate liability coverage
Your business should also set standards for employees’ automobile liability coverage. In general, state coverage requirements are typically low. California, for example, only requires $5,000 coverage for property damages, while other states only require $10,000 to $15,000 coverage for bodily injury. But a serious accident, resulting in disabling injuries or fatalities, can result in claims costs in the millions.
Your insurance carrier and broker can help recommend minimum coverage requirements and also suggest changes to your company’s commercial auto coverage based on your potential exposure. Employees who use their personal vehicles for work frequently may also want to consider adding business use endorsements to their personal automobile policies. Maintain copies of employees’ certificates of insurance detailing coverage periods and limits and request updated copies every year.
4. Require regular vehicle maintenance
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