Many businesses require travel during the workday, whether to client locations or on short errands around town. During these trips, employees can encounter accidents and other mishaps in company-owned vehicles or in their personal vehicles.
Developing Safety Protocols
When employees are allowed to drive company vehicles, it is important that employers establish a safety program that communicates the proper operating and safety procedures they must follow.
- Avoid using cell phones during vehicle operation unless using a hands-free device.
- Seat belts must be worn at all times and by all passengers.
- Drivers are required to follow all state and federal traffic laws.
- Only approved employees are allowed to drive the vehicles.
- Establish the times and days of the week that the vehicle may be driven.
- Company policy on personal use of company vehicles.
- Proper procedures for reporting accidents and maintenance issues.
Obtain Proper Insurance
Businesses have additional insurance needs when they own vehicles because most general business policies do not cover vehicles. Instead, they typically need a separate business auto policy that can be tailored so some vehicles have broader coverage than others.
For more background on how liability coverage works for businesses, see Understanding Business Liability Insurance.
Employees and Personal Vehicles
Many businesses allow employees to conduct business in their personal vehicles and reimburse mileage for wear and tear, but employers are not usually required to insure an employee's private vehicle. Employers should make it clear that employees are responsible for damage to their own vehicles when driving personal cars for work.
If employees transport anything of value, employers should ensure those items are insured so the company can obtain compensation if they are damaged or stolen. Employers may also want to review related company safety topics such as Burglar, Fire Alarm and Safety Equipment Company Liability Insurance as part of a broader risk-management plan.
If you are unsure which coverages fit your operations, discuss options with your insurance provider or talk to an agent.
Frequently Asked Questions
Does a business auto policy cover all company vehicles?
A business auto policy can cover all owned vehicles but may be customized so certain vehicles receive additional protection based on use and risk.
Are employers required to insure employees' personal cars used for work?
No, employers are generally not required to insure employees' personal vehicles; employees should maintain their own auto insurance when using personal cars for business.
What should a company include in its vehicle safety program?
Key elements include rules on cellphone use, seat-belt use, approved drivers, authorized hours of use, and clear accident-reporting procedures.
Who pays for damage to merchandise transported in employee vehicles?
If items of value are transported, the employer should arrange insurance for those goods since the employee's personal auto policy may not cover business property.