Auto Liability and Your Employees


Auto Liability and Your Employees

Guard against personal use loss


The incident

A contractor allowed an employee to operate their commercial vehicles (pick up trucks) while on personal business. As a permitted user, the employee hit a school bus at an intersection. Several children on the bus required medical treatment. Litigation was initiated against the driver and the contractor. The incident could result in a claim costs approaching three quarters of a million dollars.

The investigation

The investigation found that:

  • The employee hit the school bus after running a stop sign.
  • Witnesses also said that the employee appeared to be speeding.
  • An MVR (motor vehicle record) check was run on the employee after the accident. It revealed that he had received three prior speeding violations and one violation for running a stop sign over the past five years.
  • The contractor had no formal fleet safety program requiring MVR reviews, personal use issues, driver training, etc.

Lessons learned

This accident could have been prevented. The following lessons were learned:

  1. Every contractor operating a commercial vehicle fleet needs to have a written fleet safety program in place. Written driver safety rules and vehicle use guidelines should be adopted for all company business drivers. This would include a signed acknowledgement form that the driver received and reviewed the rules. A copy of the signed acknowledgement form should be retained in the employee’s personnel file.
  2. To screen out persons with poor driving records, the Motor Vehicle Records (MVR’s) should be obtained for all drivers at least annually and prior to employment or assignment of a vehicle to a new driver. These records should be carefully examined and evaluated according to written guidelines. Persons with poor driving records should not be permitted to drive company vehicles. These MVR’s should be retained in the employee’s personnel file.
  3. A list of authorized drivers should be established to better control and identify drivers of company vehicles. This list should also include any employees who use their personal vehicles for company business.
  4. For those drivers who use their own vehicles, certificates of insurance should be obtained from the driver and their insurance carrier. The company should establish minimum liability insurance requirements for such drivers.
  5. Formal, documented accident investigations should be conducted whenever there is an accident involving a company owned vehicle or in which an employee operating their own vehicle has an accident while on company business. Each accident should be evaluated to determine whether it was considered preventable, according to pre-established preventability guidelines.

For more information please contact your agent at Professional Underwriters Inc.

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