What is a MVR?
A MVR (motor vehicle report) is report card on your employee’s driving record. It will go back 3-5 years depending on the type of license he or she may have.
Why do I need to run an MVR, doesn’t the insurance company or my agent do that for me?
The answer is yes the insurance company does a sample evaluation of your drivers somewhere between 10-50% of your reported drivers. They are evaluating the driver records for insurability purposes and will exclude certain drivers from insurance coverages when they identify an unacceptable driving record. Moreover, they will send their policy holder a driver exclusion forms but the insurance company cannot share that data with them because some of the information on an MVR is Protected under HIPAA laws. Insurance agencies by law cannot run and share information with policy holders either due to the same restrictions with protected information and HIPAA Laws.
Lawsuits associated with automobile accidents are on the increase and getting to be an expensive liability for companies that rely on the use of company owned or personal owned vehicles that are used in their business model. That risk has increased in recent years, mainly due to higher jury verdicts, the onset of distracted driving and a legal concept called negligent entrustment.
Negligent entrustment occurs when an employer is held liable for negligence by choosing or allowing an employee to operate a dangerous instrument, usually a vehicle. An employer can be found negligent if both of the following situations occur:
- The owner entrusted the vehicle to the driver;
- The driver was unlicensed, reckless, or incompetent;
- The owner knew the driver was unlicensed, reckless, or incompetent;
- The driver was negligent; and
- The driver’s negligence caused the plaintiff’s injuries.
If a driver was or is working within the scope of his or her job duties. And has permission to use a company or personal owned vehicle in their course of their job, it is presumed that the employer has entrusted the driver and allowed them to drive the vehicle. Companies must be able to show that they took all possible precautions to prevent accidents. If not, the actions they did or did not take might be construed as negligent entrustment.
How to Avoid Negligent Entrustment
Companies must find ways to reduce exposure to negligent entrustment lawsuits by adhering to the following best practices:
- Prescreen all individuals granted permission to drive for company business. Review their driving records upon hiring and then annually there afterwards.
- Provide regularly scheduled driver reviews and driver safety training sessions.
- Maintain company vehicles to ensure that they meet safety standards.
- Provide post-accident reviews and training on how the accident could have been avoided.
- Put clear safety policies in writing to minimize risks. Follow all OSHA and DOT guidelines if applicable as well as guidelines specific to your business.
- Define your permission policy. Anyone with permission to drive a company owned vehicle. Do you want them using the company vehicle after hours for non-work related activities? It is important to define your permission policy in a way that ensures flexibility but isn’t too broad.
- Regularly enforce drug and alcohol policies.
- Enforce a zero tolerance policy for driver misconduct.
By taking the aforementioned precautions, you’ll minimize the risk of your employees creating a situation in which your company is found liable. Although commercial auto insurance can minimize some liability risks, more advanced business and umbrella policies can protect against additional risks.