Business Auto Safety:
Are Nonowned Cars Your Blind Spot?

Jennifer GuerriniA partner at a consulting firm picked up his rental car in the middle of a downpour. His preferred model wasn’t available, so he quickly settled on an unfamiliar car. Driving to visit a client, he accidentally accelerated too quickly, striking another car and seriously injuring two passengers. The company’s liability topped $1 million.

In 2013, motor vehicle crashes cost employers $47.44 billion, according to the Network of Employers for Traffic Safety. The average cost of a fatal crash to an employer is $671,515.

When it comes to auto fleets, small businesses often create a formal fleet safety program for the cars the company owns. However, they don’t always extend these fleet policies and programs to the vehicles they don’t own, also known as their “incidental” fleet.

Incidental fleets include traditional rentals, car sharing and ride sharing. They also include vehicles used for company business but owned by employees, members, or partners.

Without a formal safety program, incidental fleet hazards go unchecked—everything from unsafe or distracted drivers, to vehicles that aren’t insured with business risks in mind, to poorly maintained cars. The potential results can range from fender benders to fatalities.

Fortunately, many of the consequences are preventable. If you’re responsible for your organization’s auto safety, creating and implementing a formal policy can keep your employees safer and limit your liability risks. Among the considerations:

automobileSafe cars
Do your employees rent vehicles? Consider choosing a preferred, reliable vendor. Ensure employees are aware of company policy on collision damage waivers or loss damage waivers offered by the rental company. And encourage them to rent a vehicle model they know so they’re familiar with the controls and features.

Ridesharing is an increasingly popular way to get around. According to, 15 million adults will use a transportation sharing service in 2016. It’s an innovative model, but regulations are still catching up. If your organization allows the use of ridesharing, ask whether the group submits drivers to background checks. Also investigate driver qualifications, safety training, and the condition of the vehicle.

If employees drive their own vehicles on company business, it’s important to obtain proof of insurance that shows a policy in their own name. Some insurers can set up automatic notifications if this insurance is cancelled. And keep in mind that if your employee is insured for the minimum state limits, that may not be enough for your company’s needs. Consider reimbursing employees for extra expenses paid in raising these minimums.

Safe drivers
Whether employees are driving company cars, rentals, or their own vehicles, it’s critical that they’re safe drivers. Check employees’ motor vehicle records before they drive on your behalf.

Encourage drivers to follow safety tips that minimize distractions, including pre-loading their GPS before starting the trip, staying off cell phones, renting familiar cars, and stowing luggage properly.

If an accident does happen, set a clear plan for dealing with claims. Consider building an “accident kit” with specific directions for employees to follow in the case of a crash.

For many companies, incidental fleet risks represent a risk management “blind spot.” Assessing your risks and making a plan to address them may save not just dollars, but lives.

Jenn Guerrini, MS, CSP, CDS, CSS, ASP, is an Executive Commercial Auto Specialist, Risk Engineering, for Chubb.

Categories: General Risk, small business
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