Agreement for Use of Company Vehicle: A Comprehensive Guide

Businesses often provide company vehicles to their employees for a variety of reasons – to facilitate transportation between different work locations, for instance, or to transport goods or clients. However, allowing employees to use company vehicles comes with potential risks and liabilities for the business. Therefore, it is essential to have a clear and detailed agreement in place for the use of company vehicles.

In this article, we will delve into the important aspects of an agreement for use of company vehicle, including what it should cover, its benefits, and legal considerations.

What Should an Agreement for Use of Company Vehicle Cover?

An agreement for use of company vehicle should define the terms and conditions under which an employee may use a company vehicle. The agreement should cover a range of topics such as:

1. Eligibility: Clearly define which employees are eligible for the use of a company vehicle. It is important that the eligibility criteria be objective and transparent.

2. Authorized Use: Determine the specific authorized use of the company vehicle. For instance, an employee may use the vehicle for business purposes only, or there may be certain conditions under which employees may use the vehicle for personal purposes.

3. Prohibited Use: Clearly state the prohibited use of the company vehicle. The agreement should specify any activities that are not allowed, such as using the vehicle under the influence of drugs or alcohol, racing, and reckless driving.

4. Maintenance and Repair: Specify the responsibilities of the employee regarding the maintenance and repair of the vehicle. For example, the employee may be required to take the vehicle for regular servicing and keep records of all repairs.

5. Insurance: Clearly state the insurance coverage available for the company vehicle. Include any limits of liability or deductibles that may apply.

6. Termination of Agreement: Define the circumstances under which the agreement may be terminated. For example, the agreement may be terminated if the employee violates any of the terms or if the employee`s job responsibilities change.

7. Costs and Expenses: Clearly state the costs and expenses associated with the use of the company vehicle, such as fuel and tolls. Specify how these expenses will be reimbursed.

Benefits of an Agreement for Use of Company Vehicle

There are numerous benefits to having an agreement for the use of company vehicles, including:

1. Legal Protection: Having an agreement in place can protect the business from potential legal claims. Should an employee misuse the vehicle or cause an accident, the agreement can provide the business with a legal defense.

2. Cost Control: By having an agreement in place, the business can control the costs and expenses associated with the use of the company vehicle. It can also help ensure that the vehicle is properly maintained, reducing the need for expensive repairs.

3. Improved Safety: An agreement for use of company vehicle can help improve safety by clearly defining the authorized and prohibited use of the vehicle. This can help minimize the risk of accidents and other incidents.

Legal Considerations

It is important to note that an agreement for use of company vehicle should be reviewed by legal counsel to ensure its compliance with local and state laws. Additionally, it is important to have the employee sign the agreement to indicate acceptance of its terms.

Conclusion

In summary, an agreement for use of company vehicle is an essential component of any business that provides its employees with vehicles. By defining the terms and conditions under which employees may use a company vehicle, the agreement can protect the business from potential legal claims, control costs, and improve safety. As a professional, ensure that the agreement for use of company vehicle is clear, concise, and comprehensive for maximum effectiveness.