What procedures do we need to put in place to institute a car allowance policy?

Q: “I have been instructed to create a policy/procedure for employees who receive a ‘car allowance’ for use of their personal vehicle for work purpose on a daily basis. I'm not sure where I would need to begin to determine the company's responsibility/liability as well as what documents the company should have on file from the employees, i.e. current driver’s license, personal insurance policy, driving record?”  – Marchia, Oklahoma