Driving Records May Hazardous to Your E&O
In an ongoing attempt to identify potential errors and omissions (“E&O”) issues, KAIA has solicited input from its members and legal counsel concerning situations that could create E&O exposure for our members. One such situation is the practice of insurance companies or, in some cases, agencies obtaining motor vehicle driving records (“MVRs”) for an insured's drivers. Under the United States Department of Transportation ("DOT") laws and regulations, insureds that have DOT authority are required to obtain and screen the MVRs of their drivers. There may also be state and local laws and regulations that require insureds to do this. Some insureds may assume, or be led to assume, that their insurance carrier or agency is doing this for them when insureds are requested to provide information or authorizations so companies or agencies can obtain MVRs. An insured may also assume that if the carrier or agency does not notify that a driver’s driving record is unacceptable the driver’s MVR complies with federal, state or local requirements or, as a matter of general liability exposure, the driver’s driving record does not create a liability issue. KAIA has learned of at least one instance involving a severe automobile accident where this has occurred. Insureds should be made aware that neither insurance companies nor agencies necessarily obtain and screen all the driving records of an insured’s drivers and do not typically check driving records to ensure they conform to the DOT, state, or local requirements.
As a matter of good practice, we suggest that an agency provides written notice to insureds for whom an insurance carrier or agency obtains MVRs that the insured should not rely on the company or agency to obtain and screen MVRs for them. Below is a sample notice.
NOTICE TO INSUREDS CONCERNING OBTAINING AND SCREENING DRIVING RECORDS
As part of the efforts of the (name of agency) to obtain, service and renew insurance coverage for you or your business the insurance companies from whom you purchase insurance coverage, or our agency may obtain and screen the motor vehicle driving records (MVRs) of some or all of the drivers who operate your business's vehicles or their vehicles in connection with your business. Our purpose and the purpose of an insurance carrier in obtaining and screening MVRs is to obtain information so your insurance carrier may assess the risk of insuring you or your business. Neither we nor your insurance carrier obtains and screen MVRs in an attempt to comply with any federal, state, or local laws, regulations, or ordinances or other legal obligations either you or your business may have to obtain and screen the MVRs of your drivers. You should not rely on either us or your insurance carrier to comply with any obligations you have under any law, regulation, or ordinance to obtain and screen MVRs
Will Larson is an attorney who has practiced E&O defense work in Kansas for 36 years. Over the course of his career, he has represented insurance companies and agents throughout the state. He is a consultant for KAIA on legal and policy issues.