Blog

By Zachary Zulauf, Cardata

The beverage industry is continuing its rapid expansion across the USA. The role of sales reps has become more important than ever, and directly correlates to the growth of the industry. With that growth comes more challenges. Industry reps are averaging 7.4 business trips annually, which amounts to 1,850 account visits each year. The road is truly where the action happens. This translates to an impressive 12,129 business miles per year per rep. With this surge in activity, it’s more important than ever to focus on managing risk and making sure our mobile employees are safe on the road

So let’s take a look into the aspects of our vehicle programs and where they’re intersecting with insurance requirements and liability risks. Let’s also take a look at why the shift from company cars to personal vehicles is picking up and how a strong Vehicle Reimbursement Program (VRP) can be a real game changer for the beverage industry.

With growing demands comes rising risks

The beverage industry’s growth can be seen as a bit of a double-edged sword. On one hand, it signifies a booming market with increased opportunities from coast to coast. On the other, it brings a host of challenges, particularly in managing the risks associated with a high volume of road activity. The stats are compelling: with beverage sales reps making nearly 1,850 visits per year and driving around 12,129 miles annually, the potential for accidents, liability issues, and insurance complications can increase dramatically.

As sales teams cover more ground, the need for fulsome insurance coverage is becoming more complex, and managing liability becomes more necessary than ever. The traditional approach — employees using company cars — is being reevaluated, and countless organizations are shifting towards the use of personal vehicle use for their reps. This shift requires some finesse, a nuanced approach to vehicle programs, ensuring that both the organization and its employees are sufficiently protected.

The complex intersection of vehicle programs and insurance

Understanding how and where vehicle programs intersect with insurance requirements and liability risks is very important for companies with mobile employees. A comprehensive vehicle reimbursement program (VRP) is designed to address these intersections, as well as offer a guide for managing insurance compliance and mitigating risks. Without an effective VRP, businesses just might find themselves exposed to a whole array of liabilities, from inadequate coverage to regulatory non-compliance.

A savvy and well-structured VRP offers several benefits:

Insurance compliance
Making sure that all the vehicles used for business purposes are covered under an appropriate insurance policy is a best practice. A VRP helps to maintain compliance with insurance standards and regulations, reducing the risk of fines, penalties, and legal issues.

Risk management
By offering a structured VRP for mobile employees, businesses can better manage risks associated with vehicle use. This includes addressing potential liabilities and ensuring that employees have adequate coverage in the event of an accident.

Administrative efficiency
A well-tailored VRP simplifies vehicle management, as well as the associated expenses and insurance requirements. This kind of efficiency helps reduce administrative burdens and ensures that resources — like time, money, and people-power — are allocated effectively.

Employee satisfaction
Employees who drive their own vehicles for work need to feel secure in their coverage. A well-designed VRP provides peace of mind, knowing that they are adequately protected and that their on-the-job expenses are fairly reimbursed.

Shifting from company cars to personal cars

One of the key trends in the beverage industry is the shift from company cars to personal vehicles for sales representatives. This change is driven by several factors:

Cost efficiency
Maintaining a fleet of company cars is expensive, particularly with rising fuel and maintenance costs. Using personal vehicles can reduce these overheads, making it a more cost-effective option for businesses.

Flexibility
Personal vehicles offer greater flexibility for employees. It means that employees can use their own cars for both business and personal needs. This can improve job satisfaction and work-life balance.

Reduced fleet management
Managing a fleet of company cars involves significant administrative effort, often times from someone whose job isn’t exclusively managing the company’s fleet. The role can include everything from scheduling maintenance to handling insurance claims. Shifting to personal vehicles simplifies this process and reduces administrative load.

With that being said, personal vehicles require different insurance rules and regulations for coverage compared to company cars. This means that all vehicles used for business purposes must be adequately covered to properly mitigate potential liabilities.

Vehicle reimbursement partners can help

As you make the transition to personal vehicles, having the right vehicle reimbursement partner can make all the difference. Here’s why:

Expertise and support
A dedicated partner will offer expertise in managing vehicle-related risks and seeing to it that you’re always operating compliant with insurance requirements. Their support can help your team navigate complex regulations and swiftly address any issues that arise.

Customized solutions
Every organization is unique, and a one-size-fits-all approach to vehicle programs may not be effective. A great vehicle reimbursement partner will work with you to create a customized solution that meets your specific business needs and addresses your unique business risks.

Enhanced safety
By providing comprehensive insurance coverage and risk management solutions, like driver record reporting and safety training, a partner can help ensure the safety of your employees. This includes addressing potential hazards and ensuring that all vehicles used for business purposes are adequately insured.

Administrative relief
A vehicle reimbursement partner can fully manage and streamline your administrative processes, reducing any in-office admin tedium you previously had and allowing you to focus on core business activities.

Conclusion

The beverage industry is a fast growing market, so ensuring the safety and well-being of your sales teams is more important than ever. A strong vehicle reimbursement program, supported by the right partner, can help mitigate risks, ensure compliance, save your time and money, and keep your employees protected on the road.

About Cardata

At Cardata, we are committed to helping beverage distributors transition (or partially transition) from company-owned fleets to employee-owned fleets, as well as design perfectly structured, insurance compliant, and tax-free vehicle reimbursement programs to meet your unique business needs. To learn more or to speak with one of our experts, visit our website at cardata.co