Employees are often expected to use their personal vehicles for business related trips. It could be on a regular basis, such as sales, or an occasional drop off to a customer or trip to the bank. While the employee is serving the employer in such a capacity, the principle of vicarious liability applies. Should employees get into an accident and seriously injure someone, damage another car, or injure themselves, the employer can be liable. While the employer does not actually commit the wrong, the company can be held responsible for the actions of the employee.
The employee’s auto insurance will be primary, but the problem arises when the coverage is insufficient. The employer can then be sued by the third party or be required to pay workers’ comp for the injured employee.
To control this exposure, best practices should begin with a written policy, according to two experts at Travelers who were interviewed by EHS Today. “The policy should include expectations regarding the driver’s behavior while driving on company business and require that their motor vehicle record be monitored periodically against an established standard. The policy may also state an expectation that the employee purchase personal auto insurance with certain minimum limits and not allow a business-use exclusion to be attached to the policy.”
The experts emphasize that knowing who is driving on behalf of the company, hiring safe drivers, and focusing on proper employee behavior behind the wheel is critical. The company must walk the talk. If employees read and sign “no cellphone” policies, but continually receive calls from the manager while on the road, the policy is meaningless. According to the National Safety Council, employers have been liable up to $25 million for motor vehicle crashes involving employees using a cell phone while driving.
Additionally, employers should work with employees to ensure they operate vehicles safely, which could include:
- policies regulating cell phone use and other distractions while employees are driving during work time
- policies and training regarding safe operation of vehicles
- information on the limitations of smart technologies and the issues when features are disabled
- ensuring employees are properly licensed
- minimum insurance limits
- monitoring driving records for employees who operate motor vehicles as part of their regular work duties
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