According to the United States Census Bureau, there are more than 260 million vehicles in the U.S. Chances are good your employees use club vehicles for personal use, or they use their personal vehicles while performing club business.
In either case, it is imperative that you as owner or manager develop and implement a vehicle use program to mitigate your club’s liability that may arise from an accident caused by an employee while operating a club or personal vehicle.
Employee Use of Club Vehicles for Personal Use
You should develop and implement a policy statement that outlines specifically under what conditions personal use of club vehicles is allowed and who is authorized to operate the vehicles. Club vehicles are given to employees to take home for a variety of reasons. In most cases, however, employees’ use of club vehicles is not intended to exist without limitation.
Personal use of a club vehicle should be restricted to the employee assigned to the vehicle, and non-employees, such as spouses or children, should not be permitted to operate the vehicle. Also, some automobile insurance policies limit coverage only to authorized use of the vehicle. The interest of the named insured should always be protected.
If you allow an employee to use a club vehicle for personal use, here are some suggested steps you should take:
Review the employee’s Motor Vehicle Record (MVR) to assure it is acceptable.
Complete a documented road test of the driver in the vehicle to ensure they can operate it safely.
Conduct and document a safety inspection of the vehicle before the employee takes it.
Have the employee review and sign a copy of your club vehicle safety rules that include, at a minimum, the following:
The driver must not operate the company vehicle if they have:
Consumed any alcoholic beverages.
Taken any prescription, over the counter, or illegal drug or substance that may impair driving ability.
Become intoxicated or are under the influence of any prescription, over the counter, or illegal drug or substance.
The driver shall not talk or text on a cell phone, operate a computer or other such equipment while vehicle is in motion.
All accidents will be reported to the company immediately.
5. Have the employee complete, sign, and date a written request stating:
The employee will be the only person to operate the vehicle.
How and where the vehicle will be used.
The number of miles they expect to drive the vehicle.
Dates when they expect to start using and end using the vehicle.
The cargo being transported and how it will be secured in or on the vehicle.
How many passengers they expect and that everyone will use the vehicle restraints when the vehicle is in motion.
6. Attach the following to the request:
A copy of the employee’s driver’s license.
A copy of the employee’s personal automobile insurance card. Make sure the coverage has not expired.
7. DO NOT let the employee use the vehicle if they cannot provide a valid driver’s license for the type of vehicle they want to borrow.
8. DO NOT let the employee use the vehicle if they do not have personal automobile insurance.
Employee Use of Personal Vehicle While Performing Club Business
There are many situations in which an employee drives their personal auto to perform a club-related task or activity. It is important to consider the risk that assumes in these everyday occurrences.
Driving a personal auto in lieu of a club-owned vehicle may seem to minimize an employer’s liability, but companies can be held partially liable for damages in the event of an accident, and if an insurer discovers the individual was driving for business, it may take action against the employer for subrogation purposes.
If the employee is making a work-related phone call or taking part in any club-related activity, the employer will be held accountable. When employees will be driving their own cars for work, there are several actions you can take as an employer to mitigate risk.
Purchase Hired and Non-owned Auto Coverage: Any company that allows or requires employees to use their personal vehicles for business should either purchase Hired and Non-owned Auto Coverage or add it to an existing automobile policy. Hired coverage is for situations in which autos are not owned by the company or the driver, and non-owned coverage protects the company against liability when vehicles that are owned by employees are used on behalf of the company. In the event of an accident, these policies supplement the driver’s personal auto policy, which is typically activated first. For minimal yearly premiums, these policies generally protect the company only, not the car or the driver.
Use a Company Policy to Reduce Risk: According to estimates by the National Safety Council, over one million car crashes annually are attributable to cellphone use while driving. Because distracted driving accidents can have serious implications for companies, a club policy that emphasizes the importance of driving attentively and restricts the use of mobile phones is essential to preventing employee accidents in all vehicles, both personal and company-owned. In addition, the policy should clearly state when the use of a personal vehicle will be expected or allowed, and all employee job descriptions should specify when driving a personal vehicle will be a job function. As a condition to employment and thereafter at least on a yearly basis, those employees driving personal vehicles should be required to provide:
Proof of a driver’s license
Motor vehicle safety inspection certificates
Copy of insurance certificates proving liability coverage at or above an established club limit including personal injury and medical limits
Proof that the employee has declared the use of the auto for business to their insurer
Exhaustive lists of all prescribed controlled medications
Further, you should reserve the right to check motor vehicle records annually or more frequently.
Enforce the Policy
After the driving policy has been instated, it should be actively communicated and enforced. Managers of employees using personal vehicles should be directed to monitor the safety and maintenance of those vehicles. Employees found out of compliance with the company policy should be subject to reassignment or termination. It is every employer’s responsibility to ensure its employees’ safety on the job, and those who use personal vehicles on business are no exception.
Whether employees are picking up office supplies on the way to work or driving to an off-site meeting, following formal guidelines for the use of personal vehicles can help minimize the risk of on-the-road accidents and protect your club. As an owner or manager of a club, understanding the exposures your business has allows you to have an educated discussion with your insurance agent or broker who can provide you with the most competitive rates in your area.
David A. Harnois, CCM, is a proud employee-owner of Affinity Club Underwriters, specializing in commercial and group program business. David provides insurance solutions for hundreds of clubs throughout the world. He may be reached at (973) 984-1000 x111 or at www.affinityclubs.com.
Founded in 2007, Affinity Club Underwriters is a wholesale program insurance provider specializing in the club, golf and hospitality sector. They offer claims management services, operations and coverage audits, policy and information storage and archaeology, RFP preparation, market analysis, and help in developing specific loss control programs. Affinity is the exclusive provider of the Affinity Club Program for private and semi-private golf and country club venues. Affinity is the only insurance program administrator led by golf industry experts.