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Are Your Company’s Drivers an Insurance Liability?

Angie Mansfield

October 02, 2013

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If one of your business services is delivery of products to customers or performing services at a customer's location, you're going to have to deal with the all-new set of issues that comes with having company drivers.

From insurance to complying with hours-of-service regulations, you have several things to contend with to make your delivery fleet a success.

Proper Background Checks/Licensing

First, and most importantly, you need to make sure that the people you hire as drivers will be a dependable addition to your team.

While some smaller companies may find it tempting to take a driver's word about his or her driving record, you're taking a huge risk by not performing a check.

You'll also have to determine whether the nature of your company fleet requires drivers to have a commercial license.

For example, if you're making large deliveries with vehicles that have a gross vehicle weight rating over 26,000 lbs., or if you're transporting large amounts of hazardous materials, your drivers will need CDLs.

Driver Performance

Your drivers' productivity has a direct bearing on your profits, so it's important to put guidelines in place to help them.

Here are a few things you can do to improve driver performance:

• Plan routes efficiently. By planning routes that maximize the number of stops your driver makes and minimizes the non-revenue-producing time he or she spends in the vehicle (such as driving between stops), you boost the driver's overall efficiency;
• Don't skimp on customer service. While you want to get as much productivity out of your drivers as possible, you don't want to get it at the expense of customer service. Make sure your route planning allows for a few minutes that the driver can take to make sure the customers have what they need, and that it minimizes the number of missed deliveries;
• Create best practices guidelines for dispatch and drivers. These guidelines should include finding and validating customer locations before leaving, scheduling delivery appointments to ensure customers are there when the driver arrives, and providing driving directions from stop to stop.

Insurance

If your business makes small deliveries, it can be tempting to let employees use their own vehicles.

After all, it saves you money on buying a fleet of commercial vehicles, right?

This arrangement can work, but you have to be careful. Employees using their vehicles for company business will have to have commercial insurance -- standard passenger vehicle insurance will not cover accidents that happen on the job.

Electronic On-Board Recorders

Telemetry devices (otherwise known as Electronic On-Board Recorders, or EOBR), provide a range of information that can help you -- and may be required by law.

These devices measure the number of hours a commercial vehicle is in service (to comply with regulations on the number of hours a driver can work each day). They can also automate fuel tax reporting, as well as keep track of driver performance and equipment status.

Whether or not you choose to use telemetry, you should have a system in place to keep track of driver activity and working hours. Log books and careful scheduling can help you stay within regulatory guidelines.

Hiring company drivers can be a headache, but with careful planning and an understanding of the regulations in your state, you can make your delivery fleet a success.

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