How Does a DUI Affect Company Vehicle Insurance Coverage?

Driving under the influence (DUI) is a serious offense that can have lasting consequences, including for a person’s employment. Many companies that provide vehicles for employee use have strict policies regarding DUIs. A DUI conviction can also impact insurance costs when employees drive company cars or their own vehicles for work purposes.

This article explores how a DUI affects company vehicle insurance, associated risks, and best practices businesses can implement regarding company car policies and DUI incidents.

Overview of Company Vehicle Insurance

Businesses that have employees driving as part of their jobs need to carry special auto insurance policies that go beyond basic personal car insurance. Here are some common coverages required:

• Commercial Auto Liability – Protects the company against bodily injury, property damage, and liability claims arising from auto accidents incurred by employees driving for business purposes, whether in a company car or their own vehicle.

• Physical Damage – Optional coverage to repair or replace company-owned vehicles that are damaged or stolen.

• Hired/Non-Owned – Provides liability coverage when employees drive their personal cars for work.

• Uninsured/Underinsured Motorist – Covers injuries to employee drivers caused by uninsured or underinsured motorists.

• Comprehensive – Repairs company vehicles for non-collision damage such as vandalism, weather, or theft.

When employees use their own cars for work, the company policy provides supplemental liability coverage above the employee’s personal auto policy.

Why DUIs Increase Commercial Auto Insurance Costs

Several factors cause a DUI conviction to drive up company vehicle insurance premiums:

• High-Risk Driver – Drivers with a DUI are statistically more likely to cause accidents and file claims. This risk increases insurance rates.

• License Suspension – A DUI often leads to a suspended license. Most policies prohibit coverage for drivers without valid licenses.

• SR-22 Requirements – A DUI frequently requires filing an SR-22 certificate of financial responsibility. SR-22 minimum insurance limits are higher, increasing costs.

• Excluded Driver – After a DUI, carriers may require the convicted employee to be excluded from the policy which disrupts operations.

• Liability Claims – Companies face expensive lawsuits, settlements, and legal bills if a drunk driver employee causes bodily injury, property damage, or a fatality while working.

The more employees with DUIs driving for business, the greater the insurance risk and premiums. Some insurers may even cancel coverage if multiple employees have DUIs.

Company Vehicle Insurance Options After a DUI

Companies have a few options when an employee who drives for work gets a DUI:

• Exclude Driver from Policy – The employee with the DUI conviction is named as an excluded driver on the commercial auto policy. They cannot legally drive for business purposes.

• Non-Owned Auto Only – Alter coverage so only employees driving their own vehicles are insured, while company cars are excluded.

• Change Job Duties – Transition the employee to a non-driving role to avoid insurance implications.

• Seek Specialized Insurance – Work with an insurer experienced in high-risk coverage (costs will likely be much higher).

• Terminate Employment – For serious incidents, firing the employee may be the safest option insurance-wise. But legal guidance is recommended first.

The path forward depends on the employee’s role, the company’s insurance alternatives, and whether the DUI seems like an isolated mistake versus indicative of an ongoing issue.

Implementing Effective Company Vehicle Policies

A proactive strategy can help firms properly handle employees driving for work and minimize DUI-related issues. Key elements to consider:

Risk Assessment – Identify positions where driving is required and analyze the related liability.

Driver Safety Training – Provide defensive driving courses and education on DUI avoidance.

Pre-employment Screening – Conduct driving record and background checks before hiring employees for driving-based roles.

Licensing Monitoring – Implement systems to monitor driver’s license status and points for infractions.

Fleet Safety Features – Equip company vehicles with telematics, dashcams, and other tools to encourage safe habits.

Accident Reporting – Require employees to immediately report any accidents that happen while driving on the job.

DUI Policy – Have clear and consistent policies for dealing with DUIs in company vehicles or personal cars used for work.

Company Vehicle Insurance Options After an Employee DUI

If an employee does receive a DUI, company leaders should consult with HR and legal counsel before making employment or coverage decisions. Here are some of the options to weigh:

Limit Driving – Only allow the employee to drive for essential job-related needs until the DUI case is resolved.

Temporary Reassignment – Move the employee into an alternate non-driving role temporarily until the DUI case concludes.

Duty Suspension – Suspend the employee without pay pending the outcome of the DUI charges.

Driver Exclusion – Add the employee as an excluded driver on the commercial auto policy until the suspension period passes.

Position Change – Permanently transition the employee into a non-driving position.

Treatment Program – Require participation in an addiction treatment program as a condition of continued employment.

Termination – End employment relationship altogether if the circumstances warrant it.

Any changes should be communicated in writing and the policy applied consistently for all employees. Documentation protects the company if claims or lawsuits later arise.

When Can Employee DUI Suspensions Be Lifted?

For one-time mistakes where employees take accountability, companies may consider lifting exclusions or suspensions after:

• DUI case fully concludes, including any probation or penalties
• License fully reinstated
• Ignition interlock device mandated period ends
• Substance abuse and defensive driving courses completed
• Sufficient time suspension period passes per company policy
• Insurance carrier approves reinstatement

However, for more serious or repeat offenses, permanent exclusion from driving roles may be warranted. The risk versus reward must be weighed carefully.

The Bottom Line

Employees driving under the influence in company vehicles or their own cars for work purposes create significant liability risks and financial costs through increased insurance rates. Establishing clear DUI policies, emphasizing driver safety, conducting background checks, and partnering with experienced commercial auto insurers can help businesses effectively navigate potential issues.