Reducing Your Commercial Auto Risks

For many business owners, vehicle usage creates more risk than the day-to-day operations of the shop. And, while automotive insurance claims will increase rates, you can take steps to protect yourself and your business.

If you have company vehicles, you must pay close attention to who is driving them and to how, where, and when they drive. Your drivers’ actions are your responsibility, and employees who drive company vehicles need to follow the policies and procedures that have been put in place.

Documentation is important, especially if an incident leads to court proceedings. Having up-to-date policies that all employees are aware of is critical. These policies should include the following:

1. No cell phone or other hand-held devices. These devices should never be used while driving, and managers should reassure staff that they don’t have to answer calls right away while on the road.

2. No smoking in the vehicle. Occupational Health and Safety (OHS) regulations prohibit smoking in company vehicles. In Ontario, for example, fines can reach $5,000 for an individual and $10,000 for a company.

3. No personal use. Policies should be clear that the vehicle is not for personal use or for employees’ family members to use.

4. No bad drivers. Employees with poor driving records should not have the use of a vehicle. An employee with a bad driving record can cost an employer thousands of dollars more in insurance premiums. However, excluding these employees completely also is a challenge for employers.

5. No young drivers. Set a minimum age for vehicle use. Drivers under 25 should not be able to use the vehicle without special permission.

Reducing Claims

One way to ensure that employees have clean driving records is by obtaining drivers’ abstracts. You can do this quarterly, semiannually, or annually, depending on the size of the staff and the fleet of vehicles.

A Commercial Vehicle Operator’s Registration (CVOR) Level II report from the Ministry of Transportation (MTO) also should be ordered if you have trucks weighing more than 4,500 kg to make you aware of employees with demerit points. It’s important to know where you stand with the MTO.

Your Policy

An insurance broker should set up an umbrella of liability over your automotive fleet and your business. This umbrella liability also will help protect multiple aspects of your business.

Remember, employees who drive company vehicles are affecting the driving record of the entire company. This has a direct impact on your company’s premium.

In addition, if an employee is involved in an accident with the company vehicle, that accident will stay on the claims history of the company even if that employee leaves the company. Driving records may follow the driver, but accidents and claims remain on your company’s record.

Checking with your insurance broker can allow you to better manage your commercial auto risks.

www.aon.ca