Bouchard Insurance Blog Are You Driving Your Own Success, or Being Taken For a Ride?

If your business has company vehicles and employees who drive for you, keep reading. As a business owner, it's your responsibility to have safe, qualified drivers behind the wheel of your company vehicles. StandardsTake the bull by the horns and implement a solid driver program. The first step is to establish driving criteria and standards for all driving positions. Your standards for acceptable drivers should be the same or better than your insurance company. Standards can include an experience requirement and violation guidelines. For example, someone with a certain number of points, or with a suspended license, is not eligible to drive. Solid driving standards can prevent disruption when you change auto carriers and the new carrier has different driving criteria. If your driver standards are already established and are the same or better than most carriers, you won't have to change your driving force based on the new criteria.Apply your standards consistentlyOnce you establish your standards, apply them consistently to all drivers. Stick to them. It's a poor business practice to allow an employee to drive your company vehicle if the insurance company says they are not eligible for coverage. And if you allow some people who fall outside your standards to drive, but not others, it could be considered discrimination. This could land you an EPLI claim. It's best to abide by your standards in every situation. You can protect your business from EPLI claims by making a few small changes to your employee handbook. Add wording making it the employee's responsibility to notify you of any new driving violations. Specify possible actions if the employee is later deemed unacceptable for auto insurance or fails to notify you of a violation. Then apply the rules consistently.Verify!So now make sure your drivers meet your standard. It's easy to verify the driving history of your employees with a motor vehicle report (MVR). The MVR is a report of driving history. Information on the report may include driver's license information, point history, violations, convictions, and license status. The MVR is protected under the Fair Credit Reporting Act. It's treated like a credit report, meaning you must have the employee's permission to pull the report, and if you take an adverse action (not hiring or terminating the employee) you must provide access to the report. Fines for violating this act are currently $3,756 per instance. However, the FTC reports their enforcement typically involves numerous violations. When fines are assessed, they look at the business practices and assess the fine for every instance the MVR was pulled without authorization from the individual. So, if you pulled MVRs for twenty employees without authorization, the fine will be $75,120; fifty employees, $187,800, one hundred employees $375,600, and so on.It's important to note these are just the fines for violating the FCRA. The amounts listed above don't consider discrimination lawsuits from employees, uncovered negligent entrustment claims, punitive damages, and legal fees to defend yourself.We haven't even mentioned the cost of automobile accidents yet! But wait, my agent does that....If you currently rely on your insurance agent or company to tell you if a driver is acceptable, you're missing the boat. You are giving up your power and control. You are allowing a third party to influence your hiring and firing decisions. Would you ask your banker if you could hire an accounting employee? No! You should be in control of who you hire or fire, not your insurance agent or company.Did you know if your agent or carrier runs MVRs for your employees, they can't tell you what's on the report? They can only tell you if the driver is eligible for coverage under your auto policy or not. If you have employees whose only job responsibility is to drive, you could end up in an uncomfortable position when the carrier later informs you that employee is ineligible for the insurance. It's far better for you to be in control of your hiring and firing, and not rely on the insurance company to tell you who can and can't drive your vehicles. Knowledge is power. You should know the status of your drivers before the insurance company does! As part of your hiring process, have your applicants sign an MVR authorization form, giving you permission to pull the report. Your insurance carrier will provide you with their driver guidelines. Compare each MVR to the guidelines and determine up front if they are acceptable or not. Make your hiring decision before you add the driver to your policy. You may not be aware when you run an MVR for employment purposes, it can't also be used for insurance eligibility. This is because of the single-purpose doctrine of the MVR. And your contract with your MVR provider prohibits you from sharing your MVR with your agent or carrier if you used the MVR to make an employment decision. MonitorYou're in great shape! Your driving program is in place, you're getting authorization before running MVRs for applicants, you're checking MVRs on all driving applicants, and you're making your hiring decision before notifying the carrier about your new driver. Congratulations! So what's next?Now you need to make sure your drivers remain in compliance with your standards. You need to know if any drivers get a ticket, have an accident, or end up with a suspended license. We recommend signing up for driver monitoring. It checks all your MVRs monthly and notifies you when something changes. When you participate in driver monitoring, you never go more than a month without knowing the changes to your employee driving records. The new MVR will show new tickets, accidents, and license status. (In some states, a driver's license can be suspended for non-driving events like failure to pay child support or judgments.) It's the best way to stay on top of the status of your drivers. In summary, here are the steps to control the exposures for your drivers:1. Create your internal company driving standards2. Follow your standards consistently3. Check MVRs (with authorization)4. Sign up for a driver monitoring serviceABOUT THE AUTHORMichele Schrotter is the Agency Risk Manager for Bouchard Insurance. She focuses on enterprise risk management for Bouchard & our clients. Her ultimate foal is to protect the assets of the organization by preventing and minimizing risks. | Connect on LinkedIn