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Allowing the personal use of company-owned/leased vehicles greatly increases a
company’s exposure to loss. Many companies allow the practice as an employee
fringe benefit and need to have policies in place to help minimize the risk.
Such 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.
A vehicle operation policy detailing allowed personal use of company vehicles,
as well as requirements for the use of restraints, obeying traffic laws and
towing trailers, must be in place and applied equally to all employees. Some
issues to cover in the policy include:
Who may drive the vehicle?
A company 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.
Where driving will be allowed beyond the employee, a minimum policy should
include:
“Driving is restricted to the employee and spouse, and that no children
or other persons may drive 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 driver’s motor vehicle record
should be obtained (on an ongoing basis) and reviewed to assure that the spouse
meets the company’s criteria for a qualified driver.
All drivers should be required to promptly report any convictions for moving
traffic violations or accidents involving the company’s vehicle.
Vehicle operation
A copy of the company’s vehicle operation policy should be provided to any
additional driver, and 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 also should be extended to the additional
driver.
What is the 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 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 the usage.
Use of vehicle restraints
Company policy should require the use of vehicle restraints any time a company
vehicle is being operated. It is critical that this also be specified in
policies addressing personal use of company vehicles. 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 seats).
Accidents
Drivers should be required to report any accident involving a company vehicle
to the employee’s supervisor or other designated company representative as soon
as possible following an accident. 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.
COPYRIGHT ©2004, ISO Services Properties, Inc.
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