We understand that circumstances often require employees to use their privately owned vehicles (POV) for business purposes. It is important for employees, managers, supervisors at all levels to understand an employee’s personal automobile policy is the primary coverage for liability and/or damages when involved in an accident while on district business. This also includes Trustees, elected and appointed officials of the district.
Please be advised that the auto liability coverage your entity has through GSRMA is secondary and only becomes effective once the primary policy limits are exceeded. And while it may seem obvious to some, GSRMA does not provide coverage for physical damage to privately owned vehicles. It happens that there is confusion about who covers what in the realm of insurance and claims for damages…please let us know if you have any questions regarding how this applies at your district. As always, we are here to make muddy waters clear.
Some other best practices your entity might consider as you analyze the risks of driving and develop written driving policies are:
- Privately owned vehicles driven on district business must be in sound and safe operating condition and maintained as such at the employee’s own expense;
- The employee and vehicle must be insured as outlined below;
- The employee must obey all state and local driving laws and observe driving conditions with the utmost care, including but not limited to wearing a seat belt, using Bluetooth or hands free devices, no texting while driving, and not under the influence of drugs or alcohol;;
- The employee must possess and maintain a valid California driver’s license and current medical exam, if applicable;
- All vehicles driven on district business must be properly registered with the California Department of Motor Vehicles;
- Employees who have their driver’s license suspended or revoked are required to report these conditions to their supervisor promptly; and
- The district accepts no responsibility for citations issued to an employee by any law enforcement agency while driving a vehicle on district business under any circumstance. All liabilities created by any citation will be the responsibility of employees who receive them.
- All employees who use their personal vehicle for business travel are required to maintain general automobile liability insurance of at least the minimum amounts required by the State of California However, your district can require higher limits. As GSRMA is a risk sharing pool, please be mindful that the more coverage the employee has, the less exposure to the district and pool. Employees personal coverage must be exhausted before GSRMA’s coverage kicks in. Employee’s personal insurance shall not exclude business use. Employees must provide proof of adequate insurance coverage to the district. Any employee who does not maintain the required insurance coverage will not be authorized to drive his or her personal vehicle on district business.
Does anyone at your district utilize rental cars? Utilizing a rental car and obtaining the insurance offered is an excellent risk transfer tool to cover the personal exposure presented by your business travel. If you DO NOT opt to take the insurance offered by the rental company, please be aware that your agency’s coverage will only be effective if you can show you were in the course and scope of employment when damages occurred. Again, please remember, GSRMA is a risk sharing pool and while we strive provide broad coverage to our members, we also aim to keep costs down to ensure the viability of all public agencies for years to come. Any other questions? Please give us a call at (530) 934-5633