The Risks of Employees Driving in Foreign Territories

The hazards of driving increase when you or your employees drive in unfamiliar territory.  This is especially true when driving in foreign territories without knowing the driving rules and habits within the country. Being unfamiliar with local regulations, failing to adhere to them, or making incorrect assumptions increases the likelihood of accidents. 

Factors That Increase Driving Risks

Several factors contribute to increased risk in these situations:

Lack of Familiarity

Drivers unfamiliar with the local driving rules may misinterpret road signs, fail to adhere to traffic regulations, or make incorrect assumptions about the right of way, increasing the likelihood of accidents.  This unfamiliarity with local driving rules increases the risk of accidents, which can result in bodily injury or property damage.   

Differences in signage can be confusing to a driver unfamiliar with their meanings. For example, the image used for a yield sign in the United States may be used as a stop sign in another country.  

Japan, for example, uses distinct road signs to indicate a required Stop.  This triangular sign is not only confusing for a US driver in Japan but may cause misinterpretation for a person licensed in Japan and driving in the US.

Cultural Differences and Language Barriers

 Driving customs and behaviors vary widely across countries. Employees may not anticipate or understand local driving habits, leading to confusion or dangerous situations on the road. Communication can be challenging in regions where employees do not speak the local language, especially in emergencies or interactions with law enforcement. This can exacerbate misunderstandings and increase the risk of accidents. 

Driving on opposite sides of the road to adhere to country rules and using metric vs. imperial measurements adds more complexity.  

Infrastructure Variability

Employees may struggle to navigate unfamiliar infrastructure, especially at intersections and highway interchanges, leading to errors or accidents.  Driving in unfamiliar environments can also be stressful and affect concentration and decision-making abilities, further contributing to accident risk.

License and Permit Requirements

Whether on a business trip or living in the U.S. temporarily, an important consideration is transportation requirements once you arrive.  If you plan to drive, you must determine if an International Driving Permit (IDP) is required.  IDPs prove that you hold a valid driver’s license from your country, are valid for one year, and allow you to drive in the U.S. legally.  The Motor Vehicle Department of the country that issued your foreign driver’s license provides an IDP, not the U.S. government. To rent a car, your country’s driver’s license AND an IDP may be mandatory.

Similar considerations apply to U.S. licensed drivers who plan to drive in another country. A U.S. driver’s license is valid while driving in Canada and Mexico, but other countries may require an IDP. U.S. license holders can procure their IDP from the American Automobile Association (AAA) before foreign travel. You can learn more about the driving requirements of your destination by visiting the U.S. Department of State - Bureau of Consular Affairs website. 

What Can Employers Do?

Employers should consult with their insurance providers to understand the extent of coverage for multinational driving and any additional steps required to ensure compliance with the policy terms.  Insurance coverage has clauses specifying coverage limitations or exclusions for incidents outside the designated territory. There may also be limitations regarding the types of vehicles covered in foreign territories.  If an accident occurs in a country not covered by the policy, the employer may be held liable without insurance coverage. Some companies provide travel insurance, including rental vehicle coverage for driving in foreign countries.  

It is recommended that you become familiar with the insurance contract, specifically the section describing “Who is an Insured.”  Although most commercial automobile policies in the US provide coverage for “permissive users” of an employer’s vehicle, you will want to review coverage terms concerning vehicles rented in the name of the employee. Additional policy forms may be required to extend coverage to employees who rent vehicles under their own name as opposed to under the name of the employer. 

Employers should consider implementing a risk management strategy to mitigate the potential hazards of international driving. This may involve conducting risk assessments, establishing driving policies, and providing access to resources such as language translations of driving rules and other country-specific driving requirements.

Employers should also prioritize comprehensive training, risk assessment, and adherence to local regulations to mitigate these risks and to ensure the safety of their employees and others on the road. Training and education should include local driving rules, road signs, and cultural differences in driving behavior.

As international travel and mobility continue to increase, establishing an appropriate protocol for international driving in the U.S. can help accommodate the growing number of foreign drivers, ensure that they can navigate the U.S. roads safely and responsibly, and be covered by insurance in the event of a traffic accident.

Authored by Randy Culver, Berkley Life Sciences, VP, Property & Casualty Specialist