Automobile liability poses a significant potential loss exposure to all business entities. Not just from a claims standpoint, but that a circumstance could arise that could exhaust all insurance limits and further put the assets of the company at risk. Because all drivers carry with then the name and therefore the identity of the company, it is very important that you, the employer, to the best of your knowledge and ability, understand the reasonable background of those employees you entrust with your vehicles. Honestly, think of the logos painted on the side of your vehicles as dollar signs if they are involved in an at-fault accident…especially if you’ve hired a poor driver with a history of poor driving habits. It is important that you establish a policy and then a procedure for evaluating your drivers to make sure that you hire good drivers to represent your company on the road.
Can you tell just by looking at someone that they are a good driver? Of course not! The motor vehicle report (MVR) is a standardized report (by state) that accounts for the driving records of the individual—moving violations, accidents, DUI, etc. are all documented. An MVR will verify that your present or prospective driver has a current, valid operator’s license and a “satisfactory” driving record. Violations listed on a MVR vary in significance and are identified differently by varying states. They reflect a person’s driving habits and, to a degree, indicate future driving habits/practices. As infractions can happen at any time and most employees do not report them when they occur, records should be run on an annual basis (usually at renewal time) and reflect a 5-year basis to demonstrate due diligence purposes on the part of the company.
Your company automobile usage policies should define the policies and procedures as they apply to all current and prospective employees who have access to or operate company owned vehicles or who use hired non-owned vehicles for company purposes. It should be spelled out very clearly in your employment policy manual. The policy should contain: requirements for a clean or valid drivers license and usage parameters should be clearly stated; steps for due process should be outlined; and avenues for discipline, correction, and resolution listed. As always, we suggest that you seek the advice of counsel in your specific states before considering policies to be sure they reflect specific state and federal law, don’t violate any union agreements, and that they bring about the desired effect to security and the safety of the company and the employees.
