Workers’ Compensation Risk- Employees who drive their own vehicles for business use

Employees who use their own vehicles for business purposes represent a significant workers‘ compensation exposure.

Steps should be taken to assess this workers‘ compensation exposure as there are serious outcomes after a vehicle crash involving an employee. They include, but are not limited to, the following:

• Potential costly automobile claim on the organization’s commercial policy (non owned automobile liability). This is especially true if the employee is under-insured or non-insured.
• Injuries to clients.
• Potential for increased workers‘ compensation and commercial insurance premiums.
• Potential Liability– Employer may be responsible for the actions done by their employees.
• Negative publicity.

It is important to understand your organization’s exposures to losses resulting from crashes when employees travel to meetings and appointments with their personally owned vehicles. It can be challenging to assess your travel exposure, but there are a few methods your HR I Management Department can use to assess your risk:

• Review mileage reimbursement payments to employees.
• Review expense reports that show reimbursements for training seminars, industry conferences and off-site meetings.
• Survey department managers.

Suggestions to help reduce your Workers‘ Compensation Automobile Risk:

• When possible, reduce the need to travel by using web-based technology for meetings that involve employees from multiple locations.
• Host training courses in-house or find web-based courses.
• Encourage employees to consolidate appointments and plan their routes to minimize distances traveled, exposures on the route and the total number of trips.
• Require managers to approve all trips.
• Always obtain Motor Vehicle Reports (MVRs) at hire and annually for all employees who drive company vehicles or regularly drive their own vehicles.
• Obtain a copy of the automobile insurance declaration page from each approved personal vehicle driver.
• Establish selection criteria to use when evaluating an employee’s driving record to determine if they are acceptable to drive on company business.
• Keep updated (annual) copies of licenses on file.
• Create a mandatory seatbelt policy (even if state law requires them).
• Develop a Vehicle Use Agreement which clearly spells out company expectations for drivers operating a company vehicle or personal vehicle for business i.e. transporting others.
• Prohibit non–urgent travel during severe or inclement weather.
• Limit the number of employees that travel in the same vehicle.
• Develop a policy on hours of use. Employees should not operate motor vehicles during hours they would normally be sleeping, such as leaving early in the morning to avoid overnight travel expenses.

This is intended to serve as general loss control information provided by loss control resources from Liberty Mutual.  It is not to be construed as legal advice.