The Hidden Liabilities of Employees with Suspended Licenses and Insurance Gaps

Many businesses, in industries from education to healthcare, utilize mobile workforces of employees who use their personal vehicles for their day-to-day, work-related travel. This practice often proves beneficial for both employee and employer; the former gets compensated for their business mileage in the form of mileage reimbursement payments, and the latter has a cost-effective alternative to providing their workers with company cars. 

However, as with many things in the world of business, mileage reimbursement can have a hidden dark side if not handled with the proper oversight. If a mobile employee drives for work while underinsured, uninsured, or with a suspended license, the organization employing them could face significant risks. 

The Overlooked Issues: Suspended Licenses and Insurance Gaps

Suspended Licenses:

Consider a healthcare worker who regularly uses their personal vehicle for work. If they were to receive a DUI, accumulate traffic violations, or fail to make required legal payments, they could have their license suspended. If this were to happen to an employee in your organization, would you be able to catch it in time?

Underinsured or Uninsured Employees:

Employing mobile workers with no or inadequate insurance can also prove to be problematic. For example, a mobile employee’s personal insurance could lapse, or they could have a policy that excludes work-related driving. This could result in significant liability for the employer.

The Risks to Your Company

Legal Liability and Financial Exposure

If mobile employees are driving without valid licenses or adequate insurance, their employers could face significant legal and financial risks. Should one of these employees be involved in an accident while on the job, the company could be held liable for any injuries or property damage resulting from the incident. Additionally, if it can be shown that the employer failed to verify or monitor the driving eligibility of its workers, the company could be exposed to claims of negligence.

Insurance Complications

Insurance and licensing issues for your employees can quickly become insurance issues for your company. Even commercial auto insurance companies may deny claims if the driver in question had a suspended license, or if the employee didn’t have the appropriate insurance coverage. In the short term, this might result in your company footing the bill for damages and legal cases out of its own pocket. In the longer term, your organization faces a possible increase in insurance premiums, or even a complete loss of coverage. 

Operational and Reputational Risks

Disruptions to the eligible mobility of an organization’s mobile employees are bound to have larger impacts on that business. For one, if a worker’s job description involves driving and they are not authorized to do so, their inability to fulfill their job duties will negatively impact business operations. 

If, for instance, an ineligible driver is found to be driving on the job anyway, or is involved in an accident during their workday, the resulting fallout and negative publicity could cause a serious hit to the reputation and business standing of their parent company. That unpleasant fallout may even include regulatory penalties for non-compliance with transportation safety regulations. 

How to Protect Your Business

The best way to protect your organization from these risks? Do your best to prevent them entirely. The best way to do that is with vigilance and oversight. If your company hasn’t already, it’s time to implement a continuous monitoring program, ensuring that all company employees whose jobs involve driving remain eligible and in good standing throughout their employment—not just when they’re hired. Your organization should also have a way of verifying that workers using their personal vehicles have valid and adequate insurance coverage for work-related travel. 

In addition, set a baseline for employee compliance by establishing thorough policies requiring valid driver’s licenses and comprehensive, up-to-date insurance coverage for anyone driving on behalf of the organization. These policies should be clearly communicated to employees, and compliance rigorously enforced. 

Mileage Reimbursement Made Better With CompanyMileage 

Protect your business and its hardworking mobile employees with better, smarter, mileage reimbursement solutions from CompanyMileage! 

Our mileage reimbursement software, SureMileage, takes the complications and guesswork out of reimbursement payments by optimizing and automating the process. Mobile employees simply have to enter the start and end points of their work-related trips, and from there the system automatically calculates the route between them, and the amount for reimbursement. 

Using our app, SureMobile, workers can organize and submit reports while on-the-go. Once submitted, those reports move through an automated approval workflow, easily customizable to meet the unique needs of your business, allowing supervisors and managers a greater level of oversight without getting bogged down in manual workflows and paperwork bottlenecks. 

This oversight also applies to driver eligibility. Our system includes advanced custom fields for capturing license and auto insurance details, including expiration dates. Managers can easily run reports to identify any expired documents, ensuring that all employees driving for work are properly qualified and compliant.

Let CompanyMileage help your company create the best reimbursement processes possible—and save you money in the process. To find out more about how, contact us for a demo today!