Yes, that’s another Latin phrase few of us learned in school. But if you’re the owner of a company whose employees drive company-owned or even their own vehicles for work, it’s a phrase you’d better understand.
Very simply, we’re talking about a legal doctrine that translates into “let the master answer.” That means a company can be held responsible for the negligent acts of its employees performed within the scope of their employment.
At a minimum, companies need a Commercial Auto policy, which helps pay for the damages when, for instance, an employee hits and injures a pedestrian, wrecks another car on the road or slams into a building.
But there’s a lot more business owners can do to protect themselves from the crippling jury awards that so often stem from auto-related accidents.
Most importantly, in a nation where about 90 people die each day in motor vehicle crashes, every company should have strict driver controls in place.
That starts with making certain you know who’s getting behind the wheel on your behalf and how frequently they’re doing so. Often overlooked are part-timers, temporary workers and interns. Create an approved driver list, which can help you avoid sending someone out without a valid driver’s license.
It’s also important to review everyone’s motor vehicle record at least once a year. Do they, in fact, have a driver’s license? Are there any major violations on their records? Are they medically fit? Does the employee have insurance on their vehicle at appropriate liability limits?
That’s the easy stuff. Here’s what else you should be doing, not only to protect your people and your company’s future, but to keep your policy premiums down:
Finally, resist the temptation to buy the minimum liability limit required by law. Your business needs protection against a catastrophic loss. Most commercial auto insurers will readily provide a $1 million limit of liability. Additional limits are available by purchasing a commercial umbrella policy.
Scott Asbury is an Insurance Advisor at CCIG. Reach him at ScottA@thinkccig.com or 720-212-2048.