HIGHER FEES, LICENSE SUSPENSION, AND INSURANCE COVERAGE ISSUES
– Is Your Business Prepared?
A new, stricter distracted driver law went into to effect July 1st and it doesn’t just mean no more surfing Facebook at stoplights on your way to the grocery store. The new law will have a negative impact on your ability to have car insurance covering your employees.
NEW ILLINOIS DISTRACTED DRIVING LAW PENALTIES
Illinois initially outlawed texting while driving in 2010, but officials said more restrictions were needed. The new law signed by Governor Pritzker significantly increases penalties for distracted driving. In the past, a first-time offense for distracted driving would cost you $75 and would not go on your record. Now, instead of just a warning ticket, those caught texting will be issued a moving violation that will go on their driving record. Those convicted of three moving violations in a year could have their license suspended.
OTHER STATES HAVE DISTRACTED DRIVING LAW PENALTIES
Do your employees cross state boarders to come to work or to do their job? These laws are not tightening just here in Illinois. Minnesota has a similar law coming Aug. 1. Drivers seen with an electronic device in their hand will get a $50 ticket for their first offense and $275 for subsequent offenses. According to the Milwaukee Journal Sentinel, when Minnesota’s ban starts, it will be the 19th state to implement a hand-held device ban, along with the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands, according to the National Conference of State Legislatures. Maine will make it 20 in September. These are just distracted driving laws, according to the National Conference of State Legislatures 48 states, D.C., Puerto Rico, Guam and the U.S. Virgin Islands ban text messaging for all drivers.
The National Conference on State Legislatures and The Governors Highway Safety Association both maintain lists with information about districted driving, texting bans and other similar laws. These lists are good places to reference and monitor for updates on driving laws.
HOW DO DISTRACTED DRIVING LAWS IMPACT YOUR BUSINESS?
With the growing use of electronic devices, distracted driving has become a serious safety concern. According to the National Highway Traffic Safety Administration, in 2016, distracted driving caused 3,450 deaths and resulted in 331,000 accidents. These numbers have risen significantly each year and are expected to rise again in 2019.
In certain situations, businesses can be held liable for injury or property damage caused by their employees. Most business owners are aware of the risk when an employee is using company equipment or if the employee was on company property at the time of the incident. What if the employee was off site but “on the job” at the time of the incident? Many business owners don’t realize they may be held responsible for accidents or injuries that occur while the employee is performing job duties off the premises as well. What if an employee is just picking up lunch for some coworkers, is texting and driving and gets into an accident? Under the “Distracted Driving Act” it is illegal to text and drive in Illinois. The business could be held liable for any injuries or damages that are incurred by the employee, his or her vehicle, and that of anyone else involved.
With the crackdown on distracted driving insurance companies will be taking a closer look at your employee’s motor vehicle record. The business auto policy covers only the liability of the named insured — that is, the employer, it does not cover the employee’s liability. The policies also do not cover any injuries an employee causes to a fellow employee. Workers’ compensation protects the employer from this type of claim. In some states, employees can sue their colleagues for work-related injuries under certain circumstances. The employer’s workers’ compensation insurance does not provide coverage for this kind of claim, making the employee personally liable. Some companies provide employees with liability protection for this and other situations through “employees as insureds” endorsement.
WHAT SHOULD EMPLOYERS DO?
Debbie Heerdegen, a P&C Consultant with DS&P Insurance Services, Inc., a commercial insurance broker that provides coverage and risk management solutions for companies of all sizes, suggests a few steps employers can take to protect itself from liability when employees drive their own vehicles for work travel:
- Review driving records and create an approved-driver list: All employees that use a vehicle for business use should be cleared to drive by a manager. This process should include reviewing motor vehicle records and Personal Auto Policy coverages regularly and maintaining records to help reduce risk exposure.
- Establish standards for personal vehicles: Even employees without any incidents on their motor vehicle records can be a risk to your business if they are driving personal vehicles that are not properly maintained. Establish company guidelines for maintaining personal vehicles. If employees are compensated for time spent driving or if they routinely use their personal vehicles for business, consider regularly collecting maintenance reports to gauge the reliability of personal vehicles.
- Make the company policy clear: After you create guidelines for the use of personal vehicles at your business, be sure to communicate them to your employees in a clear and timely manner. Although it is common to have policies against the use of intoxicating substances or mobile devices while driving, reminding employees of all of your company policies is an effective way to mitigate risk.
- Establish rental vehicle policies: The use of rental vehicles for business also presents exposure to risk. It may be beneficial to establish a relationship with a particular rental vehicle agency to determine which vehicles best suit the needs of your business and employees while traveling. You should also give your employees guidelines on which rental vehicle insurance coverages to accept during the rental process.
Alongside these options, WPD recommends employers to consider having their employees sign agreements promising to not “drive distracted” and to hold the employer harmless for any liability if they do. Remember to apply these policies to all distracted driving. This is not just a “no texting” law – any “distraction” could be considered a violation. Employers should also make sure this policy applies to all work-related activities including after work social events or networking meetings. Be sure to consistently enforce this policy if you learn of a violation. It is important to send a message to employees that you take these violations seriously.
MANAGEMENT-SIDE EMPLOYMENT LAWYERS
The attorneys of Waltz, Palmer & Dawson, LLC frequently counsel businesses employment law issues. If you would like to schedule an initial consultation to discuss questions you have about your business, please contact Waltz, Palmer & Dawson, LLC at (847)253-8800 or contact us online.
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