EP – Liability Versus the Almighty Dollar

By ISDA Member Michael Brennan

In “Rental Vehicles and Secure Transportation; Best practices for Less-Than Perfect Solution” (Vehicle Dynamics Institute, Nov 25, 2014), Joseph Autera, a well-known and respected leader in the Executive Protection (EP)/security driver industry, describes a scenario in which an EP/security driver finds himself behind the wheel of a rented automobile for an assignment. While the article mentions such things as vehicle type and mechanical condition, it misses a crucial point—Liability. Professional security service firms are creating situations where drivers are exposed to risk because the firms’ practices are at odds with current laws and insurance policies.

Illustrative of that point, I recently declined an EP/security driver detail in Massachusetts from a well-respected EP firm based in Florida, because they required I rent a large SUV from a widely known car rental agency. This type of request results in independent EP/security drivers assuming all the risk and leaving themselves open to liability issues because security firms effectively are circumventing the legalities of insurance contracts that bind livery services. That holds true even if the security companies pay for the car rentals, as the drivers using their licenses for the rentals assume all the responsibility. Under Massachusetts state law, livery insurance is required when a driver has a client in a vehicle and is transporting the client for a fee. Technically, the driver must have livery plates on the vehicle. Asking independent security drivers to transport anyone in a rented vehicle, for a fee, conflicts with that law.

If an EP/security driver rents a vehicle, regardless of who is paying for the rental, and picks up a client, that driver is ultimately responsible. There is no gray area.
Let’s say that there is an auto accident, and the client, principle, gets severely2 injured. Now what?? This is where the rubber meets the road. An insurance claim is filed on behalf of the client to the car rental company for $180,000.

Under common insurance company practice, an investigation is launched. Claim denied. The insurance company cites Mass General Law Ch. 90 ss 32E ½ B5d, which states, “If a collision damage waiver is purchased, only the following may be excluded from the protection of the collision damage waiver: damage or loss caused while an authorized driver is using the vehicle to push or tow anything or using the vehicle to carry persons or property for hire, unless expressly authorized in the rental agreement.” The claim now moves to the security company, which is based in another state. Claim denied again. The EP/ security driver is not considered an employee of the company, he is merely a sub-contractor. The security company circumvents legalities of insurance contracts that bind livery services by shifting the liability to the sub-contractor – the EP/ security driver.

The EP/ security driver used his driver’s license to rent the vehicle, and he signed the rental agreement. Therefore he is responsible for the sizeable medical bills as well as the damage to the rental vehicle because he didn’t have the proper insurance required under Massachusetts law. If the security company did its due diligence and hired the proper EP/ driver with the required insurance, all parties involved would be covered.

The chief goal of a professional security driver is safety. Each time an EP/security driver accepts an assignment, he or she is ultimately responsible for the client’s safety, which is the basis of their contract. Certain standards of service legally bind the driver. As professionals, we must mitigate the risk by promoting awareness. Due diligence dictates that the professional security companies and EP/ security drivers have their bases covered. If this industry accepts the fact that auto accidents are the leading cause of death and serious bodily injury throughout the world it is imperative that all parties are on the same page regarding vehicle rental practice.

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