Personal use of company owned/leased vehicles

Allowing personal use of company owned/leased vehicles greatly increases a company’s exposure to loss. Many organizations allow the practice, as an employee fringe benefit or for convenience, and therefore need to have policies in place to help minimize the risk.

Personal use may include using the vehicle to commute to and from home, run personal errands between business activities, or use of the vehicle during “off-hours” (e.g., weekends, evenings, etc.)

A vehicle operation policy detailing allowed personal use of company vehicles is permitted, as well as requirements for compliance with traffic laws (including occupant restraints), towing of trailers, etc., must be in place and applied equally to all employees. Important issues to cover in the policy include:

Vehicle driver issues

An organization should “qualify” an employee driver before allowing them to operate a company vehicle. This qualification process should extend to any other permitted operators, if personal use is allowed beyond the employee.

When driving will be allowed beyond the employee, a minimum policy should restrict driving privileges to the employee and spouse, and children or other persons from driving the company vehicle, except in emergencies.”

Where a spouse is allowed to drive the company’s vehicle, a copy of the spouse’s driver’s license should be kept on file and the spouse’s Motor Vehicle Record (MVR) should be obtained on an ongoing basis and be reviewed to assure that the spouse meets the company’s criteria for a “qualified” driver.

Drivers who are involved in a crash should be required to immediately report the incident to management. Details of the crash should be recorded by the company in the event the company is involved in future litigation.

Vehicle operation

A copy of the company’s vehicle operation policy should be provided to any additional drivers. A signed receipt indicating that the driver has received these policies should be included in the employee/driver personnel file. Driver evaluation and training requirements should also be extended to the additional driver.

Allowed radius of operation or mileage restriction

Where personal use of a company vehicle is allowed, the company should establish restrictions on the use of the vehicle beyond a certain radius of operation, or place limitations on the maximum number of miles allowed for personal use.

Employees should be required to log and report any personal mileage in the company’s vehicle. Having the employee pay a per-mile charge for personal use can help limit usage.

Use of vehicle restraints

Company policy should require the use of passenger restraints any time a company vehicle is being operated. The policy should clearly state that all drivers and passengers are to be properly restrained in the vehicle (e.g., children should be restrained in approved safety belts).

Crashes

Drivers must be required to report any crash involving a company vehicle to the employee’s supervisor or other designated company representative as soon as possible following the crash. A copy of the vehicle registration and insurance information, as well as a preliminary accident report form, should be carried in the vehicle at all times.

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