Risk Management For Employees Driving Personal Vehicles

Many companies allow their employees to use their personal vehicles to run business errands. Activities that qualify as business use include taking deposits to the bank, picking up supplies, or commuting to and from work. While employers feel that workers save on time using their cars, they could face liability after an accident. Here are ways to mitigate risks if your employees drive their cars for business purposes.

1. Review Employees’ Driving History

Employees should have impeccable driving records to drive safely at all times. It’s no secret that high-risk drivers can cause accidents, leaving a company to pay for the damages. Therefore, you need to review data to ensure that your workers have attained the right age to drive.

Besides that, employees should have car insurance with adequate coverage. This way, the risk of catering to medical expenses after an accident will be low. Enforce stringent measures to ensure that everyone has the proper documents and is fit to be on the road.

2. Consider Buying Non-Owned Auto And Hired Coverage

Even though employees have personal auto policies (PAP), it’s crucial to beef up the insurance. Purchase hired and non-owned auto insurance for more safety. You can take it as a third-party risk management technique. For instance, if your employees use rental cars, hired coverage shields the company against damages.

On the flip side, non-owned auto insurance is helpful when an employee drives their vehicle to complete business tasks such as:

  • Deliveries to another company
  • Driving to the post office
  • Picking up lunch for a company’s event
  • Visiting potential clients and customers in a specific location
  • Picking up a client from the airport
  • Collecting office supplies

3. Remind Everyone About The Organization’s Vehicle Policies

You need to communicate vehicle policies in your company clearly. If some people have forgotten about the rules, jog their memories during a meeting. Educate your staff about the dangers of drunk driving. Besides that, distracted driving is another primary cause of car crashes. According to the National Safety Council, 1 million auto accidents stem from cellphone use while driving.

Therefore, the team should avoid talking on the phone while driving. Remind everyone about all safety measures to practice on the road. If possible, employees shouldn’t use motorcycles for business use since they are prone to accidents. All these policies will reduce the chances of accidents and liability claims.

If possible, take time to train staff about the following:

  • Driving in harsh weather conditions
  • Maintaining a safe distance on the road
  • Defensive driving

4. Ensure Vehicles Are Of High Standards

Personal cars that don’t undergo routine maintenance pose a danger to your business. Vehicles can suffer mechanical failure due to underlying issues. Thus, you need to ensure that the automobiles are in excellent condition in terms of suspension, braking, and steering.

Collect maintenance reports from your team to review the following:

  • Oil change
  • The pressure of the tires
  • Transmission
  • Filters
  • Windshield

All the efforts are in a bid to certify that the vehicles are secure to drive for business purposes. Simply put, reliable cars save you from paying compensations resulting from auto accidents.

5. Check For Staff Coverage Annually

Always obtain proof of your team’s personal automobile coverage every year. Typically, an insurance company will reimburse funds to pay for losses for an employee and business. The compensation will depend on the policy limit. If you have other umbrella policies in place, you don’t have to use out-of-pocket money to cover the damages.

Thus, you can ask your staff to offer a copy of their insurance certificate. It is the only way to ascertain that your employees are compliant. While at it, check the policies to ensure they are comprehensive. Minimum liability of $500,000 is the perfect amount for sufficient insurance.

6. Establish Driver Qualification Rules

Not all staff should use their personal cars to complete work assignments. The guidelines can outline the driving eligibility in detail. If an employee violates the rules, they won’t qualify to use their vehicles for business use. For example, a salesperson who causes accidents due to reckless driving isn’t eligible to pick a client from the airport.

Such incidents increase hazards in your organization. The best way to manage the issue is setting up rules to prevent poor drivers from using their automobiles for company activities. Staff will strive hard to embrace safe driving to enjoy the benefits of using their cars at work. Create a list of competent drivers for others to follow by example. 

Final Thoughts

Employees can drive personal cars when they exhibit exemplary driving records. In addition to that, their auto coverage can complement hire and non-auto insurance in case of an accident. The company needs to set rules and enforce for everyone to embrace safe driving. Quality vehicles and regular training play a critical role in minimizing danger on the road.

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.