Company cars

[Guest michelleME]

We have several employees that are provided a company vehicle for both business and personel use as a part of the individuals compensation package. We now have an employee who is no longer insurable. Any suggestions on how to handle this situation and any thoughts for a policy going forward.

[KIP KRAUS]

I agree with you pax. However, it is not uncommon for the fleet insurer to refuse to insure cetain employees that ehty feel are high risk, i.e, too many moving violations. I think most states do have a risk pool for such drivers.

[Guest David A. Harmon]

Three thoughts here:

1. Most risk pools in the state generally provide coverage at the minimum levels (though not always).

2. It would be difficult to fire the employee (without incurring a possible lawsuit) UNLESS driving was his primary job and there was no other position for him inside of the company. If driving is primary and he is not insurability, then he would no qualify for the position and that may be grounds for dismissal.

3. It may be best for him to drive his own vehicle with PROOF of high limits of coverage including liability AND your company can reimburse him at the standard IRS mileage rate of 32.5 cents per mile - however he has to document his business miles.

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David A. Harmon

[KIP KRAUS]

Take the company car away, or sell it to the employee. It is not worth the risk of having an employee driving on company business without insurance. If the reason for the employee not being insurable is serious enough, fire the employee. If the fleet insurer doesn't want to insure the employee, he/she is likely a libility risk. Just my opinion.

[Guest nac]

To expand on Kip's theme:

If you take the car away (which you probably should), but still require the ee to drive extensively while performing company business (i.e. sales territory rep), you should require, as a condition of employement, that the ee personally carry significant levels of auto insurance - AT HIS OWN EXPENSE. I'd recommend a 250/500/50 (bodily injury/liability/property damage), or combined 300/300 with 50k property damage, which are the most common max auto liabilities available. A $1 million umbrella is also acceptable.

The last thing you want is for him to be out on company business in his own car, carrying the statutory minimum insurance, and killing someone else - you'd likely to end up on the hook, having the deeper pockets.

[david rigby]

If this is stupid, please forgive.

I'm not sure I understand the use of the term "uninsurable". In most states, liability insurance is required by statute, so that very high risk drivers, who might otherwise be uninsurable, must buy coverage at very high rates. Is this driver in a state where the laws are different?

This raises a question about those drivers who are not so bad, but not perfect. How does your company handle the insurance for them? In other words, you may need to draw a line somewhere, if that line has not already been drawn by some precedent.

The suggestions by KIP and nac seem to be viable. Do you have this in writing, for future employees as well as current?

[This message has been edited by pax (edited 03-03-2000).]