Risk Management


The main source of risk in many corporate automotive plans can be found in the responsibility for the assets of company provided vehicles. When an organization provides vehicles for its employees, whether they are owned or leased, the resultant liability is incurred by the employer alone. The company assumes 100 percent liability for the vehicles, 24 hours a day, and 7 days a week. Despite having both professional and personal usage, there is no distinction between business and non-business use in the case of an accident claim. Furthermore, the company is liable regardless of whether or not the driver of the company car is an employee of the organization.

The availability of a company provided vehicle to family members living at the primary operator’s home also increases risk. Personal use of the vehicle could involve operation by people who have unknown driving histories, are not covered by the company policy and have a lack of, or unknown driving experience.

The opportunity to reduce the risk of company owned vehicles is a major force behind the shift to employee provided automobiles. The company is removed from liability when the vehicle is no longer on company business. Employees operating their own personal vehicles have their own insurance coverage; unlike company provided vehicles where the company assumes all the risk.

With a properly designed and managed VRP (Vehicle Reimbursement Plan), employees receive accurate reimbursements that are non-taxable and the company has an IRS compliant program. Plus, CarData inspects insurance policies for each employee to ensure the policies are in force and appropriate business coverage is in place.

The result is more efficient management of risk, and ultimately company resources.

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What Our Clients Are Saying

"At first, we were reluctant to move away from fleet management. We saw it as an integral part of our corporate culture and also thought of it as recruitment leverage. Unfortunately, after one of our vehicles was involved in a DUI it became clear that the program was simply too risky to maintain. Continue reading “Testimonial – Risk Management” »