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. 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 and non-owned, also sometimes referred to as “grey fleet” or casual/reimbursable drivers. These hired and non-owned auto drivers represent some of the most high-risk yet unmonitored behind-the-wheel employees for companies.
Most Common Myths Surrounding Hired and Non-Owned Auto
Employers often believe in the myths surrounding their hired and non-owned auto driver populations. Some of the most common that we hear include:
- I am only responsible for on-the-clock incidents
- Personal insurance takes care of employee incident costs
- My employees don’t drive enough to make my company responsible
- It’s better if I don’t know my high-risk drivers
When considering the list above, it’s clear that hired and non-owned auto drivers are an unseen reality that many employeres don’t know they’re facing until it’s too late.
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11 Critical Steps to Protect Your Company Against Hired and Non-Owned Auto Risk
What You Aren’t Seeing
Businesses like yours often open themselves up to risk within their driving population without the realization that they’re doing so. Consider that 19% of all driving fatalities in the United States involved drivers with invalid licenses. Many of these invalid licenses are caused by administrative issues such as unpaid parking tickets, overdue child support and more, oftentimes leaving those drivers in the dark.
On the other hand, drivers with valid licenses cause an average of 7,000 fatal crashes every year. According to a crash and claims study conducted by SambaSafety, drivers that receive a ticket for speeding just 1 to 5 MPH over the speed limit increase their chances of being involved crash within the next year by 36%. 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.
How Hired Non-Owned Liability Appears
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, trade shows, conferences 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 driven in a day. Unfortunately, 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? If that employee was then asked to get coffee for a company meeting and gets in a fatal car crash that kills another driver on the way back, the company may be found liable and face costly litigation.
Even if you have an employee who has an incident off the clock, if an employer knows about that incident and the employee gets into a crash while driving during employment, there’s heightened liability.
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 and non-owned 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 and non-owned auto 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 fees associated with maintenance and insurance.
This is simply not true. While many employers believe they’re shedding liability through allowances, they’re actually 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 in remediating poor driving behavior and getting unsafe drivers off the road.
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. In an effort to keep costs lower upfront, a large percentage of the population 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 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. 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.
All in all, being found liable for an employee-caused incident carries a hefty price tag.
Protect Your Company Against Hired Non-Owned Liability
With so many employees using vehicles, maintaining and enforcing safety is a 24/7, 365-day effort. Regardless of the industry you work in, chances are you have someone that falls into the hired and non-owned auto category.
Understanding the legal context behind hired non-owned liability prompts questions such as, “How liable are businesses like yours?” and “Where does this legal responsibility start and stop?” To play it safe, SambaSafety advises you to consult your legal counsel for any hired non-owned liability questions, comments or concerns in your organization, as there’s no one-size-fits-all scenario.
To learn more about your responsibility as an employer when it comes to hired and non-owned auto risk, download our free white paper below. You’ll also discover actionable strategies you can implement to protect your business.