Checks on 471 drivers revealed that 8% of those using private vehicles were not properly insured.
Vehicle management company Total Motion carried out the study, which also showed that of the cars studied, both company-provided and private, 2% were untaxed and 4% of drivers had invalid licences.
Almost a fifth of cars driven on business were not properly maintained. Maintenance on 17% was found to be below par, while 14% were unroadworthy.
Simon Hill, managing director of Total Motion, said companies should be worried about prosecution if an employee or contractor driving an unsafe or illegal car was involved in an accident while on company business.
Hill said: ‘We found problems including illegal or incorrectly inflated tyres, low oil levels, dangerous brakes, lights not working and toolkits missing, which could all cause accidents or problems on the road and result in hefty repair bills or even fines.
‘Generally, the results were worse where drivers were using their own vehicles.’