Vicarious Liability

Vicarious Liability exposures include permitting or encouraging employees to use personal vehicles for business purposes or allowing family members to operate company vehicles. Without effective controls, the Company’s liability exposure is significantly increased, particularly in highly litigious societies. Providing a cash payment or mileage allowance to the employee does not relieve the Employer of liability.

Negative Positive
Personal vehicles are used regularly for business purposes with no control process in place. Employees do not use personal vehicles for business purposes.
Family members are permitted to drive company vehicles. A comprehensive process exists requiring proof of business-use coverage and coverage/limits provided to be at least the same as the company.
There is no process to review drivers licenses or driving record. All drivers are properly licensed and qualified.
Business Use Insurance is lacking, or insufficient coverage which presents a contingent exposure to the company insurance. All insurances and driver qualifications are monitored on an annual basis.

  • Develop and implement a documented process/policy which addresses requirements for business use insurance coverage/limits, driver qualifications, licence and driving record checks and an annual review process of all time-sensitive documents
  • Provide proactive driver training, knowledge testing, skills assessment and qualification standards for all drivers, including family members who are to be permitted to drive company vehicles
  • Perform comprehensive, regular loss analysis for root cause and provide timely driver intervention and/or retraining based on findings
  • Ensure that there is no business use of employees personal vehicles.
  • If financial payments are made in lieu of supplying a company vehicle, ensure that the employee provides adequate proof of business use insurance for their vehicle annually.