Crafting a Comprehensive Vehicle Use Agreement for Your Contracting Company

In residential contracting, where company vehicles often play a crucial role in transporting materials and team members to jobsites, it’s essential to have certain protocols in place regarding the company vehicle.

You likely have expectations on how an employee should handle the company vehicle. However, it is to learn that your expectations differ significantly from those of the employee. 

A vehicle use agreement between an employer and employee not only grants authorization for vehicle use, but also clearly outlines the responsibilities, liabilities, and protocols that govern that use. 

Without a meticulously drafted agreement, an employer risks exposing themselves to unnecessary liability, particularly if an employee’s actions lead to unforeseen complications.

A robust vehicle use agreement should address key elements such as maintenance protocols, employee personal use, collision procedures, and financial responsibilities. 

Below are some of the questions that we ask our clients when drafting an effective vehicle use agreement. 

Maintenance Protocols

How often does the vehicle need maintenance or upkeep? What is the protocol for getting the maintenance done? Does the employee handle it on their own or inform the company and the company handles it? What steps should the employee take if warning lights come on the vehicle’s dash? 

There is no right or wrong answer to these questions, but think about the answers and outline them in a vehicle use agreement. 

Employee Personal Use of the Vehicle

Does the employee only have use of the vehicle from the office to the jobsite?

Can they take the vehicle home at the end of the day? If they are allowed to take the vehicle home, is there any personal use of the vehicle permitted? Is the family of the employee allowed to use the vehicle if the employee takes the vehicle home? 

What counts as personal use? 

Each of these questions comes with potential liability. The liability question becomes particularly important if the employee gets in a vehicle collision. It is important to discuss these potentials with an attorney when drafting these provisions.  

Collision Procedures

If an accident does occur, what is the protocol that the employee must follow?

Should the employee state that they were at fault? Should the employee take specific pictures of the accident, scene, and vehicle? Should they take pictures of any contributing factors and other vehicles and license plates?

Does the employee know where the registration and insurance cards are located? 

After the collision, must they report it to the employer? If so, what form should that report be in, and what is the timeline for that submission? 

The employer does not want to find themselves in a situation where the employee does not have information or pictures to help in any defense. Even worse, the employee reports back that they made damning statements at the scene regarding the company’s liability. 

Financial Responsibility of the Parties

The agreement can state the financial responsibility of the parties. How does the employee pay for fuel? Does the company provide a company card, or does the employee pay and get reimbursed? Is the employee restricted to the type of fuel? 

For example, if the vehicle requires 87 octane, can the employee use 91 octane? Is the extra cost acceptable to the employer? 

A similar provision can deal with what happens if the employee must pay for parking or tolls. Both parties need to understand if the employee is financially responsible.

Many of these points might seem like common sense, but if not clearly addressed in a vehicle use agreement, the employer has no protection. 

By ensuring that both employer and employee are on the same page, this agreement fosters a professional and accountable environment, ultimately contributing to smoother operations.