What you should know about personal use of company vehicles.
Why is personal use a concern for company vehicles?
The primary reason is the potential impact on the company’s financial stability in the event of questionable accidents that may result from an employee’s personal use of your company vehicles.
Many times company vehicles are driven home by workers or driven in business situations where personal use is involved. This use may be at night, weekends, vacations or during the work day. Lack of controls for this exposure may lead to the potential of negligent entrustment liability to your company in the event of accidents during periods of uncontrolled personal use.
What should be done to reduce and better control personal use exposures?
Effective controls begin with a written policy. The policy is then presented to all drivers of company vehicles and a signed acknowledgement of their acceptance of the policy is obtained. This should be done with existing drivers and all new drivers in the future.
An effective policy clarifies
- Vehicle use limits.
- Obtaining a Motor Vehicle Record (MVR) on all potential drivers.
- Limiting travel radius of the driver for personal use.
- Outlining unusual personal use.
- Prohibiting activities that could lead to other liability exposures.
- Deductible reimbursement for accidents during personal use.
While these are few of the areas where your personal use policy can reduce your company’s financial liability that may result from an employee’s personal use of your company vehicles, you should look for other unique areas of your operations that may reveal additional areas which your policy should include.