AMHERST, N.Y., April 30, 2018 /PRNewswire/ -- The question is about risk and liability with company provided vehicles. When it is a company car, then the employer is responsible for the vehicle all the time. And when an accident happens, the employer is responsible for damages.
According to a new report based on U.S. Bureau of Labor statistics, about 40% of motor vehicle accidents are work-related, and the remaining 60% occur on personal time, which poses a significant risk to businesses who provide company cars.
Accidents on personal time can happen when any family member is driving the vehicle. Some companies' policies restrict who may drive the company car to the employee and their partner.
Due to the increased liability of providing company cars, many companies today are evaluating the risk and considering a transition to a Vehicle Reimbursement Program (VRP).
Vehicle Reimbursement Programs reimburse employees for the business use of their personal vehicle. The employee's insurance is then the primary on any collisions.
Companies that utilize Vehicle Reimbursement Programs are prudent to expand their driver risk management approach to include insurance verifications and driver license checks. Insurance needs to be checked at each insurance policy renewal, typically every six months.
Business Use coverage is an important item to check for. The term 'business use' conjures up commercial insurance requirements; however, that is definitely not the case. CarData, an expert in VRPs, says "When we review drivers' insurance policies it is quite clear, a driver either has business use coverage or the language in the insurance policy states pleasure/personal use coverage."
Research shows there is an extra premium for business use coverage of about 10%. CarData says, "The premium for business use coverage is built into the Vehicle Expense database, and so is added into the monthly reimbursement paid to drivers via a VRP."
About CarData Consultants CarData provides precision vehicle reimbursement programs for the modern, mobile workforce. CarData services save money, reduce risk, and make it easier for drivers. CarData programs are compliant with the IRS and the CRA.
CarData conducts its own primary research on vehicle insurance premiums, and uses publicly available sources including state departments of insurance, and the National Safety Council.
SOURCE CarData Consultants