“If it’s determined that our truck caused the accident, [the company] will take full responsibility.” These words came from the CEO and President of a Fortune 500 company in response to a recent motor vehicle accident involving a company truck and limo bus in which a well-known comedian and others were passengers. One person died and others were critically injured. There is no indication that the company’s employee driver was distracted by talking or texting on a cell phone, yet the accident’s global attention inflamed the ongoing discussion around an employer’s liability for an employee’s distracted driving. The company CEO’s immediate and definitive willingness to accept responsibility highlights the effect that distracted driving can have on a company’s image and its bottom-line.

The potential impact on an employer for distracted driving can be great. For example, an international beverage company was hit with a $21 million verdict ($11 million in compensatory damages and $10 million in punitive damages) in Texas in 2012 after one of its drivers caused an accident while using a cell phone behind the wheel. The verdict demonstrated that even though the company had a cell phone policy in place, that policy alone was insufficient as a defense for the negligent acts of a distracted employee. Large companies are obvious targets as juries may feel justified in punishing them for a perceived indifference to driving safety. That said, smaller businesses should not assume that they are immune from similar outcomes. A $21 million verdict has an impact on even a large enterprise, but a similar verdict against a smaller company could spell the end of the business.

The previous case is not the only example. In 2009, in Tiburzi v. Holmes Transport, Inc., there was an $18 million verdict for a plaintiff who sustained a serious brain injury after being struck by a truck driven by an employee of the defendant. The court found that at the time of the accident, the employee opened his cell phone and was checking it for text messages. The employer was liable. In Georgia in 2008, a paper company settled a case for $5.2 million for an accident in which one of its employees rear-ended the plaintiff. The employee was using her company-supplied cell phone when the accident occurred. Overall, according to the National Safety Council, a non-profit member organization comprised of more than 55,000 businesses, labor organizations, public and private entities and groups concerned about safety, “On-the-job crashes are costly to employers, incurring costs of more than $24,500 per property damage crash and $150,000 per injury crash.”

Despite the risks and possible financial consequences, distracted driving is likely to continue. The proliferation of personal electronic devices (which are referred to collectively as “cell phones”) has placed fierce pressure on businesses to always be available for both internal and external communication. The quest to remain competitive, the emergence of a younger work force that expects to be connected at all times, and the growing use of technology to facilitate working from remote locations force employers to grapple with cell phone use policies and enforcement.

Michelle Rafter of Workforce Magazine reports that 90 percent of adults in the United States have cell phones. Given that percentage, it’s not surprising that most employers have determined that they should have a cell phone policy. The National Safety Council recommends that employers design, implement and enforce cell phone policies. According to a 2013 survey by Aegis Mobility Inc., of professionals in safety, risk and fleet management from businesses across a variety of different industries, 71 percent of respondents work for companies that have some form of distracted driving policy.

In addition, national, state and local governmental entities are cracking down on cell phone use behind the wheel. All but two states impose at least some restriction on phone calls or texting while driving, and the Federal Department of Transportation recently imposed bans on texting and hand-held cell phone use for certain commercial drivers. In sum, a company simply has no other option but to have a cell phone policy for its employees.

The vast majority of employer mandated cell phone policies fall into two broad categories: “zero tolerance,” which prohibits all use of electronic devices while driving, and “hands free,” which permits use of electronic devices that do not require the driver to take his or her hands off the wheel if local laws permit. In upcoming articles, we will explore the pros and cons of these two approaches to cell phone policies.