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An employer's risk can depend on the option chosen. One option that a significant number of employers are using is an
employee vanpool. A variant on carpooling, a vanpool allows up to 15 people to share their commute, with a designated
member or members doing the driving.
In 2007, 11% of U.S. employers sponsored or operated a vanpooling program, according to the TransitCenter Commuter
Impact Survey, a poll of 245 employers sponsored by TransitCenter, a New York-based nonprofit that administers commuter
benefits.
A vanpool can be run in a number of ways, each presenting different risk scenarios: the employer may own the van and
operate the program itself; employees may own and operate the program, usually with employer subsidies; or the program
may be run by a third-party contractor, which owns and maintains the vehicle and administers the vanpool program.
Anytime people take to the road, vanpools can involve risk-including personal injury, vehicle damage and auto liability.
Because of varying state laws, workers compensation risks also may arise, experts say.
Use of contractors to operate vanpools, in which the employer's involvement is "at arm's length," is most common,
according to Steve Pederson, vp, fleet and risk management for VPSI Inc., a Troy, Mich.-based vanpool service provider,
and has become more common in recent years. "In California in particular, we've seen significant growth in the last six
or eight months. I don't know how much of it is attributable to pretax benefits or incentives, or maybe just fuel prices."
Comp Considerations
"Years ago, states were generous and they would grant the coverage," Ms. Kintner said. "Now they're not so generous, and
state by state we see them rolling it back."
While the daily commute is normally exempted from Workers' Comp claims under "coming and going" rules common to most
states, that exemption may not apply if the employer has furnished the vehicle, said Mark Kreindler, insurance manager
for VPSI.
There are, of course, exceptions. In California, for example, an employer is generally protected from Workers' Comp
claims if the vanpool is sponsored or mandated by a government entity. If an employer sponsors a vanpool program to
comply with a local trip reduction mandate, for example, "coming and going" in the vanpool would not be subject to
Workers' Comp claims. A similar ridesharing law in Florida does not require a government mandate.
Other states have statutes of varying strengths short of a full shield for employers, Mr. Kreindler said, while claims
in states without statutes are decided according to case law.
"These ridesharing laws are basically trying to clarify that these vehicles we're using for van sharing are not to be
construed as work vehicles," said VPSI's Mr. Pederson.
Ms. Kintner warned, however, that employers should still be cautious. "I feel that it's very precarious, and of course
case law can be overturned," she said. "At the very least, the employer's Workers' Comp carrier has to be put on notice
that this (vanpool) program is in place."
Getting advice is important, said Pam Ferrandino, executive vp and casualty practice leader for Willis North America Inc.
in New York. She recommends that employers arranging commuting programs consult with their broker, and Workers' Comp
board or Department of Insurance.
Auto liability
"If the vehicle is owned by the employer, that liability would go back to the employer," Ms. Ferrandino said. Outsourced
vehicle arrangements can transfer liability risk to the third-party owner/operator.
Most vanpools are, in fact, outsourced, according to Jon Martz, president of the Washington-based Assn. for Commuter
Transportation, a transportation interest group. "It's pretty rare now" for employers to own and operate their own
vanpools, Mr. Martz said.
Mr. Kreindler said that a third-party contractor can often take on potential auto liability. In addition to owning and
maintaining the vehicle, many third-party contractors will indemnify the employer for auto liability.
Indemnification usually includes a number of safety measures, including vehicle maintenance and an application and
screening process for employees who drive the van.
"I think (third-party operation) is an effective way to manage the risk," Ms. Ferrandino said. "If the employer feels
they have the critical mass (of employee demand) to manage it professionally, with the expertise of an outside vendor,
that's a decision they can make. It's about finding a way to mitigate and manage that risk by having a business partner
with best in business practices."
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As more businesses help their workers find lower-cost commuting options, employers need to be aware of the risks such
programs can raise.