Why Your Business Needs a Company Vehicle Policy

Of all the elements that make up fleet management at your business, which is the most crucial? Arguably, it’s your company vehicle policy. Especially if your company lacks one.

Why is a company vehicle policy essential? Because your business relies on vehicles and drivers to get goods, services, and support to your customers and partners. And multiple entities, from insurance companies to your local, regional, and national legislatures, take great interest in company vehicles, their drivers, and their reasons for being on the road. Among other things.

Driver Policy for Company Vehicles: Why It Matters

Clarity: A formal and well-documented company vehicle policy is something that can and should be shared with everyone in the company, and kept readily available to all. A clear and accessible policy eliminates confusion by providing the “final answer” to questions about company vehicle use.

Consistency: Business policies that are poorly documented (or not documented at all) are the first and most likely to deviated from or ignored entirely. In the case of a company vehicle policy, gaps in compliance could lead to serious injuries and legal entanglements. A single, well-documented company vehicle policy can reduce or eliminate such risks, by making consistent compliance simpler across the entire company.

Accountability: A consistent, enforced company vehicle policy enables your business to hold drivers and providers of vehicles, fuel, maintenance, and other services accountable for their respective responsibilities. A company vehicle policy – or its lack – is also how your business will be held accountable by insurers, regulators, and perhaps even law enforcement.

Your Company Vehicle Policy: What It Must Address

At a minimum, your company vehicle policy must answer four questions.

• What is a company vehicle?
• What is business use of a company vehicle?
• What is personal use of a company vehicle, if permitted?
• What is business use of a personal vehicle, if permitted?

How your company answers these questions must comply with all relevant local laws and regulations. You and your team can research basics easily online, but you definitely want the review and approval of a legal expert. (You can also read more details about answers to some of these questions in our post, “How to Control Personal Use of a Company Vehicle.”)

Your Company Vehicle Policy: What You Should Do

If your business already has a company vehicle policy, make sure it is legally compliant, documented, distributed, and enforced consistently across the entire organization. If your business doesn’t yet have a company vehicle policy in place, you can find templates and even actual copies of some companies’ policies online. However, you must still tailor your policy to meet specific business needs. You must also have it vetted by those familiar with all relevant laws wherever your business uses vehicles.

The vehicles and drivers on which your business relies can deliver significant business benefits. They can also generate significant costs and problems without excellent fleet management. That management begins with a company vehicle policy that is clear, compliant, well documented, broadly distributed, and consistently enforced.