UTICA NATIONAL RISK MANAGEMENT ALERT
Business owners need to protect their businesses from potential costly motor vehicle accidents involving hired or non-owned vehicles. Hired autos are the vehicles a company rents, leases, or borrows for business purposes.
Non-owned autos are vehicles that employees personally own and use to conduct business for their company.
Whenever possible, you should only allow drivers to use company-owned vehicles. However, you may find your business relying on employees using their own vehicles, which can expose you to significant hired and non-owned automobile liability.
Businesses will need to take steps to manage this liability exposure. The following best practices can help.
Driver Qualifications
Drivers of personally owned/leased vehicles should meet the same qualification requirements as drivers operating businessowned vehicles.
- Ensure the driver has a valid driver’s license and obtain a copy (front and back).
- Obtain a Motor Vehicle Report (MVR) for all drivers under 25 years of age from the state DMV. Do this upon hire and annually thereafter.
- Conduct a road test of all employees who drive on company business. This provides management a means to determine if the employee is a safe driver.
- Only allow designated employees to drive.
Employees who do not meet minimum established company criteria should not be allowed to operate vehicles for the business.
Insurance
- Drivers should be required to provide evidence that they maintain insurance on the vehicle, and the business should keep this information on file. In addition, businesses should consider adding “non-owned auto liability” coverage to their own insurance.
- Personal auto insurance limits of at least $300,000 is preferred. Consult your agent regarding limits.
- The employee’s policy should name the business as an additional insured.
Company Policies
Employees operating vehicles on company business should be required to comply with all driving-related laws and regulations and any business-specified policies, including:
- Distracted and aggressive driving. Cell phones should not be used while driving.
- Drug and alcohol use.
- All occupants of vehicles operated for business purposes should be required to be secured in a safety belt.
- Employees should be required to sign acknowledgements that they will abide by company driving policies.
- Vehicles must be registered. If required, they must have a current inspection.
- Require employees to maintain their vehicle in accordance with the manufacturer’s recommended service guidelines.
Motor Vehicle Accidents
- Employees operating their owned/leased vehicles on company business who are involved in a crash should be required to immediately report the incident to management.
- Details of the crash should be recorded by the company in the event the company is involved in future litigation.
- Drivers should exchange the following information:
- Driver information – the other driver’s name, address and phone number
- Vehicle information – plate number and the make, model, year and color of the vehicle
- Insurance information – carrier name, policy number, effective dates
- Witness names and contact information
- The driver should contact their insurance company as soon as possible.
For additional information visit uticanational.com or contact your local risk management representative.
5-R-1415 | Ed. 12-2021