As an employer you probably have employees drive their own cars on business errands everyday – to the bank to deposit today’s receipts, to the printer to pick up new brochures, to Office Depot to buy supplies.
But have you considered the liability consequences associated with having your employees drive on company business? Are you familiar with the driving record of each of these employees? Does each one carry current automobile insurance?
Who pays for the ticket that your employee gets while speeding to get your package to Federal Express because it absolutely, positively has to be at your customer’s facility tomorrow and you waited until the last minute to finish the project?
Most importantly, who is responsible when your employee has an at fault accident and someone in another vehicle is seriously injured?
In Texas, you can be held responsible for the actions of your employees on the job, including driving accidents. This is known as the doctrine of respondeat superior, which is Latin for “deep pocket”, or at least might as well be.
I know as a small business owner you don’t believe your pockets are deep at all, but in a state like Texas where an individual’s house, car, and most of her personal property are exempt from being sold to pay off a personal injury judgment, your business assets are the more lucrative place for a plaintiff’s lawyer to look for payment.
How do you as an employer protect whatever is in your pockets, deep or not? Take a few steps to ensure that you have minimized your risks when employees are driving and then ensure that you are covered by insurance to handle the risks you can’t avoid.
Don’t let an employee drive on business unless you know that the employee is a good driver. It is easy to check Texas driving records online now, or your insurance agent can check them for you.
What you should look for is whether in the last three years the employee has had any major violations, such as driving while under the influence of alcohol, a hit and run or any kind of vehicular homicide. One such incident should ban that employee from driving on company business.
You should also check the number of minor violations the employee has committed. More than 2 reckless driving citations, 3 speeding tickets, 2 at fault accidents, or 2 red light or stop sign violations in the last 3 years are too many for that employee to be driving for you.
You should also adopt a personnel policy that explains to your employees your driving requirements. They should know that their driving records will be checked annually. They must be alerted to their financial responsibility for any moving violation or parking ticket they receive while on company business. And you should never require or imply that your employee should speed to get an errand finished on time.
If the employee is driving his own car on company errands, then the policy should state that the employee is responsible for upkeep and maintenance on his car so that it is in good working condition, with brake lights and turn signals that actually light up, for example.
Another recently needed addition to the policy should be a restriction on the use of cell phones while driving. Your employees should be trained either to pull over to stop in a safe place while using a mobile phone, or you should provide ear pieces with microphones so that they can talk hands free while driving.
You must require your employees to maintain automobile liability insurance on their own vehicles if they will be driving for you. In Texas, all drivers are by law required to carry this insurance, but many do not. How do they get away with it? They purchase insurance during the month that the license renewal is due and then cancel the policy immediately and receive a refund.
Therefore, the careful employer will require an employee who must drive as part of the job to provide proof of liability insurance and then double-check with that insurance company to make sure the policy is still in effect.
Finally, you should carry “hired and non-owned automobile” insurance as part of your general liability coverage. This policy protects the company if liable for bodily injury or property damage arising out of the use of a vehicle you lease, borrow or rent for business or one which your employee uses for business purposes. It pays damages in excess of the employee’s own policy or any other applicable coverage and should pay the cost of defending any personal injury suit that is brought against the company, which defense is often more expensive than the actual damages found against the company.