While you trust that your employees are careful drivers, you can’t necessarily assume that everyone else on the road is just as careful. And, with the rate of vehicle crashes the highest New Zealand has seen in 16 years, it could be a matter of luck that none of your company cars has been damaged in an accident yet.
Furthermore, it’s not just car accidents that could put your company vehicle off the road. Theft, fire, flood, or other damage could also mean your employees can’t use the cars or trucks they depend on to do their job.
When your business vehicles are off the road, it can affect your efficiency and potential to make money. The longer they’re out of action, the more money you could be losing.
And that’s before you factor in the cost of repairing the damage or replacing the vehicle.
Sometimes a vehicle can be written off when the lease value is more than the market value. A special extension is required cover the higher lease value. Your business will be out of pocket for this amount if the policy is not properly extended.
Businesses that use company cars to support their activities face many and varied risks, beyond the direct consequences of the accident damage, not being adequately insured and commencing repairs promptly qualifies as a significant business risk.
If you provide a fully maintained company car to your employees then you need to make sure insurance is part of the package.
To minimise the risk, it’s important to put clear policies in place around business vehicles, such as:
- protocols associated with Health & Safety guidelines in the workplace
- only allowing drivers with a good record to drive company vehicles
- requiring drivers to comply with all road rules including wearing seat belts, sticking to the speed limit, not using mobile phones or other devices while driving, etc.
- taking a zero-tolerance approach to drink driving or driving under the effect of drugs
- limiting non-business use
- requiring employees to lock and secure their vehicles when not in use
- limiting drivers to employees and, in some cases, their spouses
- performing regular maintenance and inspection of the vehicle.
Furthermore, your business can reduce the risk of accidents by ensuring there is enough time scheduled between meetings or deliveries so that employees don’t feel the need to speed or take other risks.
It’s also useful to put a policy in place for employees to follow if they do have an incident. This should include immediately getting in touch with your insurance broker.
Having the right insurance can save your business time and money in case of an accident or incident. It can be valuable to work with an experienced insurance broker to help find the right policy for your business. A broker can also help streamline the process if you do make a claim, increasing your chances of a successful outcome.
To find out more about how NZbrokers can help, contact a member today.