Managing Risk When Employees Use Personal Vehicles for BusinessEmployees are often required to travel between worksites or run company errands, and providing a company car is not always practical. As a result, many organizations rely on their employees to use their personal vehicles for business purposes. While common, this practice introduces meaningful risk. Here’s what employers need to know.
What’s the Problem with Using Personal Cars for Work?
The road is a dangerous place. Even if your workers are just going a few blocks to pick up supplies, there’s a risk of injury. In fact, it’s probably the riskiest thing they do all day.
Work-related motor vehicle crashes account for approximately 35% of all work-related deaths, according to the CDC. In every major industry group, motor vehicle crashes are either the first or second leading cause of worker deaths.
Traffic collisions are also a major source of liability. When a worker is involved in a crash, the company may be held liable for any injuries or property damage. These judgements can be huge, and nuclear verdicts of $10 million or more have become increasingly common.
Driving can also be an aggravating activity. Road rage and reckless driving are serious problems, and if your workers participate in bad driving behavior, it could reflect poorly on your company, even if no collisions result. This is also a risk when drivers use company cars, but at least then they should realize they’re representing the company. When workers are driving personal vehicles, they may forget to act professionally.
These are real risks, but with strong risk management practices, they can be mitigated.
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Start with Screening.
If you were hiring a driver, you’d check the individual’s driving history. If you’re going to have an employee drive as one of their work duties, even if it’s only part of their job and it’s in their own personal vehicle, it’s also smart to check the worker’s driving history.
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Put It in Writing.
A written policy ensures that everyone is on the same page regarding personal vehicles. Create a policy and train managers and workers to follow it. Also review the policy periodically, or after any incidents or close calls, to see if updates are needed.
Some issues to address in your written policy include:
- Who can use their personal vehicles for work.
- When workers can use their personal vehicles for work.
- What personal auto insurance workers need to maintain.
- What driving habits are expected (for example, no distracted driving, aggressive driving, or speeding).
- How workers should report collisions or other incidents that occur while using their personal vehicles for work.
- Whether workers will be reimbursed or compensated for costs associated with the use of their personal vehicles, and that process.
- What happens if the written policies are violated.
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Prioritize Worker Safety.
Consider a company with a written policy that says employees must drive at the speed limit and give their full attention to the road. That sounds good, but what happens if mangers don’t give workers enough time to travel and require workers to answer texts or calls on the road?
Company culture has a significant effect on day-to-day practices. Foster a work environment that prioritizes safety – not just in writing, but in the actual actions of your workforce.
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Secure Hired and Non-Owned Auto Insurance
Your workers need personal auto insurance that meets state requirements for their personal vehicles. However, this coverage is designed to protect them and the people who share a road with them; it is not designed to protect your company. In fact, personal auto insurance typically excludes business activity.
If a worker is responsible for a collision, the injured party may name your company in a lawsuit. The worker’s personal insurance will not cover your company, so you need your own insurance policy for this. This coverage is available through hired and non-owned auto insurance. If a worker is involved in a collision while driving a personal, rented or leased vehicle, hired and non-owned auto insurance will provide liability coverage for your company, making this an important coverage for any company that has workers use non-company vehicles for work purposes.
Are You Overlooking Other Risks?
Heffernan Insurance Brokers can help you understand business exposures and secure appropriate insurance to protect your business and your team. Learn more.
