CNA logoNon-owned Vehicle Exposure: Every Provider Needs a Vehicle Safety Program

Every time a caregiver uses a personal vehicle on behalf of a home care provider, the company faces the threat of a traffic accident and subsequent lawsuit. The following example of an accident involving an employee-owned car, based on a real case, illustrates the potential consequences of such an occurrence:

While driving his own car for XYZ Home Services, an employee ran a red light, striking another vehicle and seriously injuring his passenger, a home care client. Supervisors were unaware that the employee’s auto insurance had lapsed, because the company had not implemented verification policies and procedures. The client filed suit, asserting that XYZ Home Services was liable for the actions of its employee, and demanded $900,000 in damages. The suit was eventually settled for $500,000. The vicarious liability of XYZ Home Services for this incident places the company at risk for insurance nonrenewal, making future policy placement difficult and potentially subjecting the organization to financial exposure.

This scenario demonstrates the necessity of implementing a formal, comprehensive and consistently enforced vehicle safety/risk control program, in order to protect clients, employees, other drivers and organizational assets. Every home care provider must regularly assess the effectiveness of its program, using the following checklist of requirements:

The vehicle safety program includes a written policy that…

  • designates one individual as responsible for program implementation, record keeping and staff compliance
  • permits only designated employees to use personal or client-owned vehicles for company business
  • defines driver selection procedures and driver eligibility criteria
  • incorporates a formal process to verify and document drivers’ licensure, insurance and compliance with program requirements
  • outlines disciplinary measures for policy violations, potentially including revocation of driving privileges and termination of employment
  • mandates safety improvements where indicated in response to investigative findings
  • calls for distribution of regular compliance reports to company leadership

Staff drivers undergo–and sign a form acknowledging completion of–a vehicle safety training course at hire and annually thereafter, which includes information about…

  • program requirements, policies and procedures
  • safe driving practices
  • incident and accident reporting

Driver selection procedures…

  • contain explicit written acceptability criteria for employee drivers
  • implement a process upon hire and annually thereafter to verify that all designated drivers have a current, valid driver’s license
  • mandate review of designated drivers’ motor vehicle records prior to assigning driving privileges and annually thereafter
  • require proof of valid insurance on personal automobiles and client vehicles driven by employees, both initially and ongoing
  • confirm that employee and client automobile liability policies meet state coverage requirements, preferably with combined single limits of at least $300,000
  • remove employees from the approved driver list if their insurance lapses or driver’s license expires

Driver eligibility criteria–as noted in the terms and conditions of the policy issued by the CNA underwriting company–minimally ensure that…

  • drivers are at least 21 years old and have at least three years of driving experience
  • drivers over 70 years of age undergo annual verification by a physician of their fitness to drive
  • no drivers have any type A (i.e., major) violations in the past five years
  • no drivers have three or more type B (i.e., minor) violations or two or more at-fault accidents in a three-year period

Home care providers rely upon employee- or client-owned automobiles to conduct company business. By implementing a formal vehicle safety program and consistently enforcing its provisions, organizations will maximize safety while protecting their tangible and intangible assets.

The information, examples and suggestions presented in this material have been developed from sources believed to be reliable, but they should not be construed as legal or other
professional advice. CNA accepts no responsibility for the accuracy or completeness of this material and recommends the consultation with competent legal counsel and/or other professional advisors before applying this material in any particular factual situations. Please note that Internet hyperlinks cited herein are active as of the date of publication, but may be subject to change or discontinuation. This material is for illustrative purposes and is not intended to constitute a contract. Please remember that only the relevant insurance policy can provide the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and may be subject to change without notice. Use of the term “partnership” and/or “partner” should not be construed to represent a legally binding partnership. CNA is a registered trademark of CNA Financial Corporation. Copyright ©2012 CNA. All rights reserved.