My driving record is good,
why should it matter what driving record my drivers have?
If there’s one thing Henry Ford made a bare necessity in America it was the automobile. After food, shelter and clothing an automobile is the most important necessity in our daily lives. Businesses are no different, the automobile is a major, functional part of their operation.
A business owner strives to maintain a “perfect” driving record so that they can continue functioning and achieve sustainability. Most business owners know their driving record is a large factor in their commercial auto insurance premium, but did you know their employees’ driving records are just as important if not more! If you own a business the information below is particularly for you!
From a high level there are various factors that go in to developing commercial auto insurance rates:
- Business Occupation. (A pizza delivery business will have a lot more auto exposure than a law firm.)
- Location. (A rural area presents less concern for driver interaction and theft than a large, urban area.)
- Type of Vehicle. (Van, Pickup Truck, Tractor Trailer, Private Passenger, Construction Equipment, etc..)
All the unique factors above are largely uncontrolled by the business owner.
The largest factor the business owner can control is the employees they hire.
Employees are the face of the company and the life-force behind it. The most important item to consider for any employee who will have access to a business vehicle will be their driving record. Any driver who has accidents and violations should be hired with caution. Remember: The driving record of the employees play a large impact in the business’s auto insurance premium.
A driver with multiple accidents and violations can bring about many unforeseen issues to the business operation. Each driver of this nature brings a negative impact to the commercial auto insurance premium. Even a small moving violation can cause an increase in the commercial auto insurance. Some of the negative impacts can be as high as a 25 percent increase from the base insurance rates, especially if more than half the drivers have a poor driving record. Most insurance companies will review the past three years however it is not unheard of to go five years back.
Businesses should strive to hire employees with “perfect” driving records to keep their premiums at a competitive level. Also keep in mind as a business owner, you are vicariously liable for negative actions of your employees. This is another major factor when hiring any driver with violations. If that driver has driving issues in the past it is always said that frequency leads to severity. Exercise caution when there are more than 2 moving violations in a single year, regardless how slight.
In addition to hiring perfect drivers, all business owners should implement safe driving habits and defensive driving courses as “must haves” in their business operation.
Protecting a business by hiring great drivers is perhaps one of the most important things a business owner can do!