America’s increasingly mobile workforce has increased the importance of robust auto allowance and vehicle reimbursement policies. Mobile employees often travel 500+ miles a month. More miles means more risk, necessitating a business vehicle policy that protects both employees and employers in the event of an accident.
To reduce risk exposure, it is imperative that companies establish safe driving policies and clear auto insurance parameters for their mobile employees. A quality auto allowance and vehicle reimbursement program will not only require mobile employees to maintain auto insurance coverage on their personal vehicle but also specify minimum coverage sufficient to protect both the employee and the employer.
Take these steps to mitigate risk when it comes to employees’ driving habits and auto insurance requirements:
- Maintain Written Policies and Procedures that Promote Safe Driving
A professional auto allowance or reimbursement policy should instruct your employees in safe driving practices while protecting your company’s employees and financial resources. Create a safe driver culture by incentivizing or rewarding good driving and creating a disciplinary action system that helps correct bad driving. A very helpful resource is to consult is the 10 Step Program to Minimize Crash Risk.
- Establish Clear and Sufficient Auto Insurance Minimums
Many companies either do not set auto insurance minimums or do not require sufficient insurance. mBurse recommends business insurance for a mobile employee’s personal vehicle, which comes with higher levels of coverage. At a minimum, business insurance covers $100,000 for bodily injury for one person, $300,000 for all persons per accident, and $50,000 for property damage—a 100/300/50 policy.
- Verify Auto Insurance Coverage Regularly
If your organization pays a car allowance or mileage reimbursement, you are the custodian of record. This level of liability gives you the right and responsibility to verify insurance coverage. If an accident occurs during business hours and it turns out that an employee’s coverage has lapsed or was insufficient, it’s going to cost you. It is best practice to verify insurance twice a year to ensure there have not been any changes or lapses in coverage.
If you would like more information about either mobile employee risk visit our guide on mobile employee risk. Our guide is the greatest contains everything you need to protect your organization from mobile employee risk relating to company car allowance, company provided vehicles, and mileage reimbursement policies.