A motor vehicle report (MVR) is a person’s driving record that shows information about his or her driver’s license, traffic violations, and other personal information. These reports are available in part to help companies review the driving behaviors of their fleet drivers.
Being privy to a driver’s MVR information is essential for any company fleet, especially with regards to liability concerns. Having the ability to review these reports can help fleets determine if their drivers are prone to bad driving behaviors, and therefore are more susceptible to being held liable in an automotive crash. And for fleets with a personal use or reimbursement policy, there exist other risks of liability that fleets should be aware of.
If a fleet driver is held liable for a crash, the issues resulting from this will work their way back to the company itself, including possible litigation. One notable accusation that can arise is that of negligent entrustment. Negligent entrustment occurs when a company is held liable for negligently providing an entrustee with a “dangerous instrumentality” with which that person causes injury to a third party. In the case for fleets, this could be the result of a driver harming someone else with his or her vehicle.
Personal Use Liability Risks
Depending on whether a driver is being reimbursed by his or her employer for using a personal vehicle, or is utilizing a company provided vehicle from home can cause some confusion in regards to who is held responsible in the event of a crash. For example, some fleets believe that reimbursing drivers for using their own vehicles for work use eliminates the company’s risk of being held liable if a driver is involved in an accident, which is not true.
“Sadly many companies believe if a driver is on a reimbursement program that the company is not responsible for the driver’s actions,” said Bob Martines, CEO of Corporate Claims Management (CCM). “This is a severe lack of logic or common sense by (the company) for ignoring MVRs, regardless of the frequency, for reimbursed drivers.”
Brian Kinniry, senior director of strategic services for The CEI Group, further stressed the importance of reviewing MVRs for drivers under reimbursement.
“Any employee who has the potential to drive for company business in some capacity, but not often enough to warrant a company-provided vehicle, would be defined as a part of the company’s 'gray' fleet, especially if any legal proceedings were to arise,” said Kinniry. “These 'gray' fleet drivers will use their personal vehicles to complete business, and the company should run an MVR check on these drivers at least once every year, since the company can be held liable for negligent entrustment if these drivers get into an accident.”
Regular MVR Checks
As Kinniry mentioned, fleets are encouraged to review driver MVRs on an annual basis as a means to keep them shielded from instances of possible liability, regardless of who owns the vehicle. This can help fleets find out who the problem drivers are and also makes it clear to arbitrators that the company is doing its part to employ safe drivers.
“Companies should run an MVR on anyone they’re allowing to operate a company vehicle on an annual basis, at minimum. They should do the same for anyone driving their own vehicle on behalf of company business (i.e., reimbursed drivers),” echoed Jerry Veres, certified director of safety for Fleet Response.
Fleets that can review driver MVRs more than once a year are encouraged to do so, as this will help further limit potential liability risks. Doing so also creates more opportunities for fleets to evaluate who their high-risk drivers are.
“Depending on the tools a client utilizes to request MVRs and validate them, an authorized representative can pull select MVRs based on a frequency as needed per the driver/employee/spouse past history,” said Martines of CCM. “A driver with a more severe driving record may fall into a quarterly run versus other semi-annually or annually. The cost to pull a few more MVRs for the high-risk drivers is easily acceptable if just one liability claim is averted.”
Fleets that provide drivers with a company vehicle should also review MVRs at least once a year. And for fleets that allow family members the use of a company vehicle, additional risks become a possibility and should be considered.
A key element in safely allowing family use of a company-provided vehicle is to establish a clearly written policy that identifies when vehicles are being driven for business hours; this can also apply to fleets with a reimbursement program.
The policy can help reduce liability if a fleet crash is being reviewed by an arbitrator. As an example, if a fleet’s policy neglects to mention the driver’s family is not granted permission to drive a company-provided vehicle, but the driver has a son or daughter who ends up driving and crashing the vehicle.
“Companies typically have very specific policy language that fleet drivers sign off on regarding vehicle use,” said Veres of Fleet Response. “Whether or not to allow a spouse or household driver to operate the company vehicle is a company decision, and employees who are found to violate the policy typically can be faced with fines, penalties, and potential loss of the vehicle.”
Keeping drivers engaged and aware of the fleet policy is a good way to eliminate this risk.
Kinniry of CEI offered additional insight to family usage of company-provided vehicles.
“Unauthorized use of a company vehicle by family members should be expressly prohibited in the fleet safety policy and signed off on by each and every fleet driver,” said Kinniry. “Allowing a driver’s spouse or adult family member to use a company vehicle is common, but those drivers should be registered in an official secondary driver program with a current MVR status on file paired with frequent driver training and coaching tips.”
Clearly establishing the fleet policy is key to reducing liability for the aforementioned reasons. This also applies to fleets that provide a reimbursement policy, according to Rich Tillotson, VP of sales and director of business development, CCM.
“In a reimbursement program the risk exposure can be mitigated somewhat if client reimbursement agreement indicates reimbursement is only paid for ‘employee’ use of personal car on company time for company business,” said Tillotson.
Tillotson added that pharmaceutical, cosmetic, and companies that maintain a field sales force are examples of fleets that may be the most susceptible to risks resulting from family accidents as these industries have a more common practice of family member use of company vehicles.
“We have found that there is no particular pattern or policy for any specific type of business where MVRs are pulled at a higher frequency rate,” said Martines. “However, the higher profile companies in the pharmaceutical industry, client services, and trucking subscribe to more is better, so their frequency rates are much higher.”