Employee in her car typing into the navigation system with packages to deliver on the passenger seat.
You can require employees to use their personal vehicles for work, but there is a lot of due diligence and responsibility attached to that for business owners. — Getty Images/Luis Alvarez

Employees who need to drive frequently for their jobs can use their personal vehicles instead of a company car. But this could become a liability, so it’s essential to take steps to protect your employee and your business.

When would employees need to drive for work?

Using a personal vehicle for work-related tasks is common for sales positions where employees must travel to sales calls. But there are other scenarios when employees may need to drive for work-related tasks, including:

  • Visiting clients.
  • Traveling between worksites.
  • Running errands on behalf of the business.
  • Delivering something to a client or vendor.
  • Picking up food for a company event.
  • Going to the bank or post office.

[Read more: Should You Give Employees a Company Car?]

Can you require employees to use their own vehicles for work?

Yes, you can require employees to use a personal vehicle for work, and for many employers, this may seem safer than providing company cars. But you may be surprised to learn that it does put you at risk of vicarious liability.

Vicarious liability means you could be held liable for unlawful actions taken by someone else. For instance, if one of your employees acts negligently and gets in a car accident while using their car for work purposes, you could be held responsible for the damages.

You may not have driven the car yourself, but you’re responsible for your employee’s activities while they’re on the job. And this is especially true if you didn’t take reasonable steps to prevent the negligent behavior from occurring.

You may not have driven the car yourself, but you’re responsible for your employee’s activities while they’re on the job.

How to protect your company from liability

If your employees need to drive for work-related activities and you can’t provide company cars, they may have to use their own vehicles. Fortunately, you can take steps to keep your employees safe and minimize your company’s liability.

Check your employee’s driving history

Before you send one of your employees out to run a work-related activity, you should ensure that it’s appropriate for them to be driving in the first place. Make sure they have a current driver’s license, motor vehicle safety inspection certificate, and proof of insurance.

It’s also a good idea to review their motor vehicle record (MVR) to ensure that it’s acceptable and there are no red flags. Make copies of these documents and keep them in a file for your employees — this demonstrates that you did your due diligence as an employer.

[Read more: Everything You Need to Know About Business Vehicle Insurance]

Have company policies in place

It’s also important to have company policies around driving for work. Here are some examples of policies you could put in place:

  • Employees shouldn’t be driving if they’re intoxicated or using other controlled substances that could impair their ability to operate a vehicle.
  • Employees won’t text, talk on the phone, or operate any electronic equipment while driving.
  • If an accident occurs, the employee will immediately let their employer know about it.

Once you’ve completed your employee driving policy, have your employees review and sign the document. Their signature ensures that everyone understands the expectations around driving for work-related tasks.

[Read more: How to Develop HR Policies for a Startup]

Enforce the policy

Just having your employees agree to a driving policy isn’t enough — you should also enforce it to the best of your ability. Ensure your employees maintain their vehicles' safety and are up to date on their insurance and driver’s license. And it’s a good idea to check their motor vehicle records regularly.

Have the right insurance in place

Finally, it’s a good idea to purchase hired and non-owned auto coverage. Hired coverage protects you in situations where the company or the driver doesn’t own the vehicle, like if an employee is driving a borrowed or rented car.

Non-owned auto coverage protects your company from liability when employees use their own cars for work. If an employee gets in an accident, their auto insurance will be activated first, and the company policies can supplement it.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

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Published October 24, 2022