Insights from Losses: Employer Responsibility in Managing Driver Risk

According to the Network of Employers for Traffic Safety (NETS), the cost of motor vehicle accidents can really add up for a company. The average cost to an employer for a work-related motor vehicle accident occurring on a highway was $26,084 in 2019, and the average cost of an injury was $74,418.

“The potential liability for organizations with employees who drive, whether they use their own vehicle or operate a company-owned vehicle, is significant,” said Erica Baird, Risk Control Manager at Safety National. “In addition to the cost of repairing vehicles and providing medical care for anyone injured, employers can experience reputational damage if the accident is picked up by the news.”

These rising costs underscore the importance of employer oversight, particularly when it comes to managing employees who drive as part of their job.

Protecting an Organization Through Driver Evaluation

Employers are ultimately responsible for their employees’ actions, a concept known as vicarious liability, which is particularly impactful in auto liability cases. To protect the organization, employers should be able to demonstrate that they fully evaluate their drivers.

Documentation showing that the employee’s driving record was reviewed becomes very important, especially when they are involved in a motor vehicle accident that results in a fatality or serious injury. If, for example, the employer authorized an employee to drive who does not have a valid license or has a history of risky behavior, and that employee caused a serious accident, the employer could face punitive damages for negligent entrustment for failing to properly vet the employee.

In the eyes of the law, the employer is responsible for ensuring that employees are qualified to take on certain tasks, particularly those, like driving, that may affect the general public.

Establishing a Vetting Process for All Drivers 

The driver criteria should be published in the fleet safety program. These criteria are used to determine whether a driver is eligible to drive on behalf of the company, typically before being hired. However, the criteria may also render current drivers ineligible due to convictions or accidents.

Driver criteria generally use a point system to assess a driving record over several years and often consider major violations over a longer period. The policy should list what is considered a major violation. Examples include driving under the influence, vehicular manslaughter, and reckless driving. Major violations within a set period make an applicant ineligible to drive. Minor violations, such as tickets for speeding less than 15 mph over the limit, failure to stop, and following too closely, are often evaluated by assigning and tallying points for each offense. If the total points exceed a set number, such as three points, the driver may be ineligible to drive.

The fleet program should require drivers to report any motor vehicle convictions and any health changes that might affect their ability to drive. Motor vehicle records (MVRs) should be reviewed at least annually. However, continuous monitoring is available through some state programs and through vendors who can notify the employer if a driver is convicted of a traffic violation.