A man stands next to the open sliding door of a large white van, holding two bouquets of flowers. The man is bald and wearing a dark green polo shirt and khakis. The bouquets are made up of clusters of white, pink, and red flowers.
Your vehicle use policy should outline how employees would qualify to use a company vehicle. One basic way to qualify would be by necessity, for employees like delivery drivers. — Getty Images/Betsie Van Der Meer

A company vehicle use policy is a legally binding agreement that clearly defines what your business will and won’t allow when an eligible employee uses a company vehicle. Having this policy in place protects businesses if an employee gets hurt while using company property or misuses it and causes damage.

Here’s what to include in a company vehicle use policy for your business.

Policy overview

A policy overview should provide drivers with a summary of the requirements and rules for operating a company vehicle. It should include a brief description of what defines a company vehicle, along with when and to whom the policy applies (e.g., the policy applies both during and outside of working hours, should an employee be operating the vehicle).

[Read more: 5 Things to Know About Company-Owned Vehicles]

Qualifications for using a company vehicle

In this section, outline the employee qualifications for using a company vehicle. For example, an employee may qualify if they require a vehicle to complete their daily work responsibilities, such as a delivery driver. Others may qualify if they travel over a certain number of miles in a given time frame for work purposes, including traveling to a sales pitch or meeting with clients.

Qualifying employees should hold a valid driver’s license and have a clean driving record — e.g., no car accidents through the fault of the employee within [X] years or fines/arrests due to violating vehicle laws.

Driver rules and responsibilities

Include a section regarding driver rules and responsibilities to ensure the employee remains safe while operating a company vehicle. Detail how you want employees to use these vehicles and what employees will use the company vehicle for, along with prohibited uses.

Additionally, this section should lay out specifics for employees and provide a list of “rules” to follow when operating the vehicle, such as following speed limits, driving sober, avoiding traffic violations, parking legally (not blocking fire hydrants or double parking), ensuring the driver carries their license, locking doors when not in use, and prohibiting texting while driving.

A policy overview should provide drivers with a summary of the requirements and rules for operating a company vehicle.

Personal use

The policy should clearly state how and when employees can use the company car. Most companies restrict vehicle usage to working hours only (or on a case-by-case basis) to prohibit personal use — your policy should explicitly state what personal use means to your business, such as using it for personal errands or commuting to and from work, so employees don’t misuse company cars.

[Read more: Do Your Employees Use Their Own Vehicles for Work? Here's What You Need to Know]

Employees with disabilities

Most employees with disabilities can still operate a vehicle and will likely qualify for a company vehicle. To remain inclusive, companies should define specific steps and accommodations they will make for drivers with a disability, such as providing parking spots.

List eligibility exclusions as well, such as employees who are taking medication that may impair their ability to drive.

Accident procedures

In this section, outline the steps the driver should take if they get into an accident, including who the driver should report the accident to (such as the HR department), where they can access registration and insurance cards, whose information they should exchange with the other involved party, and who will be responsible for paying for the damages.

Company responsibilities and non-responsibilities

State what the company will be responsible for, including ensuring the safety of the vehicle, scheduling regular maintenance, and paying for car insurance and registration. Define what responsibilities your company covers, and conversely, what you are not responsible for, such as covering fines and tickets incurred by employees who did not obey traffic laws and posting bail for arrested drivers.

[Read more: Have Company Vehicles? This Is What You Need to Know About Commercial Auto Insurance]

Disciplinary actions

This section should list any fines or punishments the violator will incur if they misuse the company vehicle. For example, a minor offense may lead to warnings, but numerous minor offenses — or major offenses, such as drunk driving or leasing out the vehicle for personal benefit — may lead to the revocation of the company car, employee termination, or legal action.

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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