With a (thankfully) booming construction industry these days and growth even happening outside of our home towns, travel and transportation is more of a focus than ever. Safety should always be the first concern but liability is a close second.
Some business owners may question what the right thing to do is when it comes to employees getting to and from job sites daily. Should they drive their own personal vehicle? Or should you provide a company vehicle? What do either of those scenarios look like from a coverage standpoint to be sure you and your company are protected? Here are a few tips that will hopefully help clarify these uncertainties.
Quite simply, it is not recommended that employees drive their own personal vehicles for work purposes. Work use is typically defined by going to or from a job, transporting tools or equipment, and/or other employees riding along as passengers. An accident occurring in this type of situation could be denied coverage by the vehicle owner’s personal insurance policy as well as the business policy since that vehicle is not listed there and the driver is most likely not listed either.
If you decide to provide a company vehicle to an employee, there are a few steps you can take (in addition to adding them to your policy immediately) to avoid what we call “negligent entrustment.”
- On the written job application, include a place to list all driving violations or accidents for the past 5 years. You should also include a section authorizing the employer to obtain and review motor vehicle records (MVR) on a regular basis.
- Before allowing anyone to drive a vehicle for company purposes, have the individual provide proof of a valid driver’s license.
- If the individual has lived in other states during the previous 5 years, obtain drivers’ license information for those states.
- Require all drivers to report any violations they receive or accidents they are involved in as soon as possible. This includes incidents involving personal vehicles.
- Check all drivers’ MVRs at least once a year.
Other important factors include:
• Vehicle Condition and Maintenance
• Driver Training
• Policy of Restricting Personal Use of company vehicles (including those vehicles that go home with employees after work hours)
Evaluating the current status of your company’s fleet safety and risk management program is extremely important. And a step further, making the effort to improve those policies where needed on a regular basis will help limit your company’s exposure to a negligent entrustment judgment, as well as help control your future insurance costs.
