Whether you manage a fleet or oversee safety and risk, you know that groups like commercial drivers, branded vehicle drivers and even those that are hired exclusively to drive on behalf of the company benefit from a driver safety policy and program. Oftentimes, these drivers fall in line with all stipulations laid out as their adherence to them is usually tied to their employment or license status.
What is hired/non-owned auto risk?
Have you considered though the estimated 30-40 million drivers in their own vehicles (or even a rental car) that meet with customers, travel to patients, visit offices or job sites, grab that afternoon coffee pick-me-up or do part-time work? There’s a name for this driver population – hired/non-owned, sometimes referred to as grey fleet or casual/reimbursable drivers.
Your hired/non-owned drivers represent some of the most high-risk yet unmonitored behind the wheel employee’s companies like yours have. We know it may not seem as if your business is liable for these drivers, but we can promise they are plus any additional insurance costs incurred.
Hired/non-owned most common myths
Employers often believe in the myths surrounding their hired/non-owned driver population. Some of the most common that we hear include:
- It’s better if I don’t know my high-risk drivers
- I am only responsible for on the clock incidents
- Personal insurance takes care of employee incident costs
- My employees don’t drive the amount that brings on responsibility
When tackling these myths head on, companies like yours can be better prepared to tackle risk. After all, hired/non-owned drivers are an unseen reality that many don’t know they’re equipped with until it’s too late.
What you aren’t seeing
Businesses like yours often open themselves up to risk within their driving population, all the while not knowing they’re doing so. Consider that 19 percent of all driving fatalities in the United States involved drivers with invalid licenses. Many invalid licenses are caused by administrative issues such as unpaid parking tickets, overdue child support and more, oftentimes leaving those drivers in the dark.
What’s cause for concern is the number of drivers without invalid licenses. They cause an average of 7,000 fatal crashes every year. Throw in such information including speeding 15 MPH over the speed limit increases crash chances by 67 and a history of negligent driving increases crash likelihood by 67 percent and you have a recipe for trouble. Odds are, one of your employees running out to grab more paper for the office is just as high-risk as the employee driving as a primary function of their job.
Drivers in your company who make up part of those statistics could be skirting your safety efforts, in turn leaving your company open to enormous liability.
How hired/non-owned liability appears
There’s no one-size-fits-all scenario with hired/non-owned drivers because of the often legally abstract concepts that contain nuance. SambaSafety advises you to consult your legal counsel for any hired/non-owned driver questions, comments or concerns in your organization.
Legal decisions resulting from hired/non-owned drivers most often are dictated by the legal doctrine, Respondeat Superior. In layman’s terms, Respondeat Superior is the legal doctrine that says when you hire someone, you take on their liability for whatever happens in the course of employment.
Understanding the legal context behind hired/non-owned drivers prompts questions, including how liable are businesses like yours and where does this legal responsibility start and stop? Maybe you’ve encountered one out of many scenarios when managing your fleet.
Traveling for work
Salespeople sometimes travel to and from places, depending on what they’re selling. Some of the most common locations include other offices, their own place of employment and everywhere in-between. With little to no ability to avoid getting behind the wheel of a vehicle for their role, salespeople are often being given direction by their employer to ensure the best and most efficient results.
These include different elements like a list of prospects, a route or the number of miles allowed to be drive in a day. The more control that employers exert over their drivers who may not be regularly monitored, the easier it is to be named in a lawsuit as an at-fault party, whether they occupy a branded vehicle or not.
We know that not all employees drive regularly. What if one of those irregular drivers received a DUI? That employee was then asked to get coffee for a company meeting and, on the way, back, gets in a fatal car crash, killing another driver. The company is found liable and must pay millions to the family of the person killed.
Even if you have an employee who has an incident off the clock, if an employer knows about that incident and gets into a crash while driving during employment, there’s heightened liability. Companies can incur additional costs due to personal insurance of the employee only covering some of the bodily harm, but not all.
Branded vehicles are high-stakes real estate for your brand. The presence of a brand suggests to those who look at it even subconsciously that there’s implied authority and only the most qualified are entrusted with such vehicles. Even the implications that come with a branded vehicle used by an employee can increase hired/non-owned driver liability risk.
Did you know that there is another common problem you need to be aware of when managing your hired-non owned drivers?
The insurance dilemma
Many companies are moving toward hired/non-owned fleets, in part due to the increase in commercial auto insurance premiums. This means that employees are driving personal vehicles, while employers are giving them allowances to do so. In theory, this monthly allowance covers employee driver costs while reducing employer maintenance burden and insurance.
This is simply not true. While many employers believe they’re shedding liability through allowances, they’re increasing exposure risk. There are several problems with the allowance approach, including:
A false sense of security
Allowances can potentially lead to decreased vigilance. It’s not uncommon for employers to infrequently pull motor vehicle records (MVRs) on their drivers, sometimes waiting up to two years between pulls. This leaves employers open to immense risk and a visibility gap.
Think of everything that can happen to a driver in a year. When an incident does occur, a company that only periodically checks MVRs lacks the ability to showcase that they maintained an appropriate level of vigilance
Lack of appropriate auto coverage
Most employers don’t require their employees to maintain an appropriate level of auto coverage or aren’t taking the steps to appropriately vet that coverage. A large percentage of the population, to keep costs lower upfront, will only meet the required compulsory liability limits, or coverage limits, set by the state. When an employer isn’t mandating certain levels of auto coverage, it becomes an easy way to try and save money.
Imagine this – if someone decided to elect only the minimum amount of coverage required to drive. State minimums can range from $40,000-60,000, meaning that the range above is the maximum amount the insurance company would cover if a crash occurred. The problem here is that if the person with the minimum coverage were in a vehicular incident costing more than that range, the company, if found negligent, becomes liable. They’re deemed responsible through their insurance for the expenses after the employee’s limit was met.
The idea of being found liable for an employee-caused incident should make you shudder, as it carries a hefty price tag.
Protect yourself against hired/non-owned drivers
With so many employees using vehicles, maintaining and enforcing safety is a 24/7, 365-day effort. No matter the industry you work in and the drivers you’re incidentally or consciously putting behind the wheel, chances are you have someone considered hired/non-owned.
Download our white paper, What Every Safety Professional Must Know to Act Upon Their Hired/Non-Owned Drivers, and learn of nine actionable ways you can protect your company against hired/non-owned auto liability.