With more deskless employees than ever before, it’s important for employers to make sure you’re taking initiative to limit your company’s liability when you have drivers on the road.
[.split-text-wrap][.text-wrap][.text-wrap-paragraph]Sadly, risk management is often a blindspot for many companies. In fact, in a survey of distributors, Everlance found that 93% of companies are missing opportunities to minimize risk.[.text-wrap-paragraph][.text-wrap-paragraph]One risk is if you have employees who drive for work, but you do not have a clear travel policy that is regularly enforced. You are unfortunately leaving the drivers, who may not have sufficient personal insurance, and your employer exposed when an accident happens on the job.[.text-wrap-paragraph][.text-wrap][.mixed-font-a][.is-green-bold]93%[.is-green-bold][.is-info]of distributors can do more to reduce liability risk[.is-info][.mixed-font-a][.split-text-wrap]The company is at risk because it potentially falls “within the scope of employment.” You could be liable for the cost of any damages that the driver’s insurance does not cover.
Another sort of risk is if you are reimbursing your employees for work mileage without keeping detailed and accurate mileage logs. In the event of an audit by the IRS, you could be found out of compliance and fined.
This article will help expose current liabilities in your vehicle program, and provide action steps you can take to limit your risk exposure.
Most companies already have a policy, but when was the last time you or your employees reviewed it? It’s a good idea to re-evaluate your policy regularly to ensure it continues to protect you, the employer, as well as drivers, as business conditions change.
[.blue-wrap][.list-head]Compliance Checklist[.list-head][.list-subheading]Use these questions to gauge any risk factors in your current policy or practices:[.list-subheading][.list-div][.list-div][.c-row-flex] [.is-1][.list-check][.list-check][.is-1]Are drivers required to maintain valid insurance that includes both bodily injury liability and property damage?[.c-row-flex][.c-row-flex][.is-1][.list-check][.list-check][.is-1]Are there vehicle requirements to ensure any vehicles driven for work are in safe working condition?[.c-row-flex][.c-row-flex][.is-1][.list-check][.list-check][.is-1]Are drivers required to keep a valid driver’s license and ensure it doesn’t expire?[.c-row-flex][.c-row-flex][.is-1][.list-check][.list-check][.is-1]How often do we monitor for compliance with policy requirements?[.c-row-flex][.c-row-flex][.is-1][.list-check][.list-check][.is-1]Are we conducting MVR (Motor Vehicle Record Checks) for new hires to ensure they have clean driving records? How about after they’re hired?[.c-row-flex][.c-row-flex][.is-1][.list-check][.list-check] [.is-1]Are there clear delineations in our policy for Personal vs. Company use of company owned vehicles?[.c-row-flex][.blue-wrap]
Every company is different and you should customize your policy based on your needs, but this checklist is a good starting point.
If you think you would like some expert guidance, Everlance can help. We’ve worked with many customers to strengthen their policies and mitigate risk.
Once you’ve reviewed and updated your policy, refresh your employees on what those requirements are to help them stay in compliance.
Your policy only protects you as well as it is enforced. Once you’ve outlined a clear policy, it’s important to also design a process for how employees will be held accountable to it.
A few options to consider on your policy’s implementation/reinforcement:
Whether you have a large team or even just a handful of mobile employees, the task of monitoring their compliance can quickly become a time-consuming administrative burden, not to mention tedious.
Minimizing your company’s risk can get pushed to the bottom of the to-do list, below other “more urgent” tasks. But if you have already outlined a clear policy as well as the process of enforcing it, the best thing you can do for yourself is make it easy to monitor.
If you have a platform that houses driver’s documentation, that’s a good start. But make sure that you have a way of keeping track of when these documents expire, and gathering updated documents from the driver before they do so.
[.866][.blue-line]Documents expire regularly, so simply conducting a manual check annually or even every 6 months will leave you exposed.[.blue-line][.866]
For example, most insurance policies expire every six months. If a driver is compliant in January but their policy expires in February and you don’t do another check until June, you could be left exposed for over four months!
You also want to minimize your exposure without having to spend a lot of time deciphering documents. Especially when it comes to insurance, policy documents vary so much from carrier to carrier that it can quickly become a headache trying to determine if a driver’s policy meets your requirements.
Instead, find a tech-based solution that is easier for you, the policy owner, as well as the drivers who have to comply.
At Everlance, we offer compliance verification as a part of our Fixed & Variable Rate program, as well as part of our Driver Checkup add-on. It automates the collection and verification of employee auto insurance and driver’s licenses to reduce the risk of costly liability damages when an employee gets in a car accident on the job.
Now that you’ve done an exhaustive assessment of your policies, and developed a strategy for monitoring and enforcement that is easy to implement, there is another risk to consider: If you were audited by the IRS, do you have detailed mileage logs to justify the miles that your drivers are reimbursed for?
Paper-based or spreadsheet logs will work, as long as they contain all the information required by the IRS. The problem is, they can be time-consuming for everyone involved, leading to employees not completing the logs and leaving you exposed, or time wasted chasing them down to complete records.
A mileage tracking app like Everlance, can help minimize risk by automating the creation of mileage logs for employees. It records employees as they drive, and then they simply have to submit work trips to you for reimbursement and compliance. Plus, an automated system improves accuracy and accountability, and gives time back to your team.
Automating the mileage tracking process is one more way to simplify your risk management process while also ensuring drivers are being paid fairly and accurately.