Damage to Personal Vehicles on Bank Business

I get more web-traffic on this topic as any other thing I have posted in the last 20 years.  Several clients have asked about it recently.

Jane has been an employee of your bank for many years. She is a good and faithful employee. On her way back from a meeting, a truck kicks up a stone that breaks Jane’s windshield. Jane is now in your office asking you to pay for her windshield.

It’s a common occurrence. Many employees expect that you will pay for damage to their car while they are driving on company business. Some think you have insurance to cover it.

Would you pay it? What if the damage from an accident was $2,500 and Jane didn’t have collision insurance?

Set your employee expectations. Let employees know your policy by sending an annual reminder.

Here’s my suggestion:

Dear Employee,

From time to time it may be necessary for you to drive your personal vehicle on company business. The purpose of this letter is to remind you of our policy.

All employees using their personal vehicle for approved business travel will be reimbursed for such use at a rate of $.xx per mile. This fee is intended to repay you for your expenses in operating the vehicle, including the cost of gas, oil, tires, maintenance, and the cost of insurance.

We require that all employees who drive personal vehicles on company business carry at least <<$x00,000>> of liability protection and uninsured motorist coverage. The purchase of “comprehensive” and collision insurance is at your discretion.

In the event of an accident while you are driving on company business, you should look to your own insurance to protect you and your vehicle. Remember, the auto insurance you buy is what will protect you on or off company time. Our company automobile insurance policy provides no coverage for your vehicle.

Should you have any questions regarding this memo, please see your supervisor.

Many see my recommendation as harsh. However, I’ve seen too many instances where employers have caused themselves great trouble by agreeing to pay for these accidents for their employees.