Some very important risks in your construction fleet are often overlooked. Both independent contractors and your employees using their personal vehicles could pose hidden exposure to your business.
Hidden Construction Fleet Risk #1: Independent Contractors
If you hire independent contractors, you could be sued for their actions in relation to a vehicle accident that they cause while working for you.
To reduce this exposure, ensure that each of your independent contractors has a valid auto liability insurance policy. Make sure that their policy is in force throughout the duration of their contract with you. Additionally, be sure that their insurance carrier is financially stable. You can verify the insurance carrier’s financial strength at www.ambest.com.
Obtain a valid certificate of insurance from each contractor at the outset of your engagement and verify that coverage exists with their insurance agency.
Look up the insurance agent listed on the certificate on a web search engine and call the number that you find online to verify coverage.
This will help ensure that the certificate is valid and help avoid potential certificate fraud.
Sometimes, contractors obtain coverage to meet your contract requirements and then cancel the policy shortly thereafter. Be sure to re-check coverage at certain intervals to reduce this risk.
We recommend to our construction fleet clients that they do an initial certificate check around day 45. This is because many cancellations for non-payment happen after the first 30 days of coverage. Then, check again around days 90, 180 and once more before the contract anniversary.
Hidden Construction Fleet Risk #2: Employee use of personal vehicles
Many construction companies allow their employees to use their personal vehicles in the course of their employment. For example, some office employees may run company errands in the own car. Your sales representatives could also use their own personal vehicle as well.
It’s not a great idea to allow your employees to use their personal vehicle for work. However, this practice is a business reality.
You can reduce this loss exposure by ordering a copy of each potential driver’s motor vehicle record annually. This review should include anyone who has access to a construction fleet vehicle that is owned or operated by your company.
You can protect your company from the financial impact of being sued from employees using their own vehicles for work. Be sure to have adequate hired and non-owned liability insurance coverage on your automobile liability policy. Your insurance agent can verify if you have these coverages in place.
About the author
Sam Tucker is the CEO of Carrier Risk Solutions, Inc. Based in Atlanta, GA, CRS helps businesses with DOT compliance and fleet safety management. You can reach Sam by email at STucker@CarrierRiskSolutions.com or by phone at 1-855-211-5550.
