Unsuitable Driver--Now What?

April 3, 2009

Federated encourages business owners to adequately screen and regularly evaluate drivers of company vehicles.  We require clients to establish their own written driver acceptability standards and evaluate drivers accordingly, both before they are hired and periodically during employment. 

Nevertheless, from time to time, a driver’s record fails to meet Federated’s own acceptability standards to such a degree that we must exclude the driver from the business auto policy. While necessary, this can put the business owner in a difficult position if the employee is an otherwise valuable contributor to the company’s bottom line. In these situations, our clients sometimes ask us for help in placing coverage for the unacceptable driver with another insurer.

Business owners unnecessarily put their businesses at risk when they allow unqualified drivers to operate company vehicles, whether insured by Federated or elsewhere. Unqualified drivers endanger themselves, the lives of other employees, and the public.  In addition, a company may lose business due to negative publicity that often accompanies accidents involving company vehicles.

Equally significant, under the doctrine of vicarious liability, business owners can be held liable for the actions of their drivers.  Practicing due diligence in screening employees can go a long way to minimize employer liability. Also, a business may be subject to punitive damages that cannot be covered by insurance in some states.

Removing an unacceptable driver from the road can be inconvenient and burdensome.  However, for most business owners it is a small price to pay with so much at stake.

This article provided courtesy of Federated Mutual Insurance Company, your association’s recommended insurer.  This publication is intended to provide general recommendations regarding risk prevention.  It is not intended to include all steps or processes necessary to adequately protect you, your business or your customers. You should always consult your personal attorney and insurance professional for advice unique to you and your business.  ©Copyright 2005 Federated Mutual Insurance Company, All Rights Reserved. 

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