Hazard Ahead: Company Vehicles Increase Company Liability

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, which may happen in a company-owned vehicle or in their personal vehicle. Unfortunately, many of the consequences of these driving mishaps can negatively impact the company that employs them. However, there are ways to alleviate the company liability involved with owning company vehicles by establishing safety protocols and obtaining the right insurance.

Developing Safety Protocols

When employees are allowed to drive company vehicles, it is imperative that employers develop a safety program that communicates the popery operating and safety procedures that they must follow. Some important rules to include are:

- 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 need a separate business auto policy. These policies are flexible enough to provide the same coverage to all vehicles, or provide some vehicles with additional coverage. For example, vans that transport merchandise may need more coverage than cars which simply go to the post office daily.

Employees and Personal Vehicles

Many businesses allow employees to conduct business in their personal vehicle. While employers typically pay the employee a certain amount per mile for wear and tear, they are not required to insure an employee's vehicle. Instead, employers must make it clear to employees that they are responsible for damage caused to their own vehicles. However, if employees will be transporting anything of value, those items should be insured to obtain compensation if they are damaged or stolen. 

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