What You Need to Know First
An average driver can expect to be in three or four vehicle accidents in their lifetime, and one of those accidents can likely happen involving a company vehicle. One of the most urgent issues involving a company vehicle accident will be determining if the employee driving the vehicle will be personally responsible for the accident or if the company who owns the vehicle will be responsible. Here are some common terms used by insurance companies and attorneys that are useful to understand if you ever get in this situation.
Negligence: This happens when a vehicle operator fails to act responsibly or does something no reasonable driver would do. Example, driving the wrong way on a one-way street.
Liability: Liability simply means responsibility. The at-fault driver or vehicle owner is usually liable for the victim’s damages.
Damages: For car accident victims this can include property damage, medical bills, therapy and rehab costs, related out-of-pocket expenses, replacement services, consortium claims, lost wages, and pain and suffering.
Third-party: Third-party is used for individuals or businesses other than you and your employer. If you cause an accident while driving the company car, the occupants of the other car who ask for money are third-party claimants.
When the Company is Responsible
The relationship between employers and employees who drive company vehicles falls under the legal doctrine of respondeat superior. This means the employers are legally responsible for the actions of their employees while acting within the scope of their employment. The employer is responsible for paying the injuries and property damage caused by an employee while driving their company vehicle. In most cases of car accidents at work, the employer’s liability coverage indemnifies the employee against third-party actions. This means the employer’s insurance company protects the employee from paying out of their own pocket for damages to injured victims. Indemnifying an employee also means the employer’s liability insurance pays the employee’s legal fees if they are named in a lawsuit after the accident.
When the Employee is Responsible
There are situations when a company’s insurance will not cover an employee who causes a car accident.
Criminal Activity: An exception to employee indemnification applies when the employee is committing a crime while driving a company vehicle. If the accident involves criminal activity, the employer may rightfully refuse to indemnify the employee form third-party lawsuits. This also includes driving under the influence or drugs or alcohol.
Going on a Frolic: If you are driving irresponsibly with a company vehicle, some jurisdictions call that a “frolic.” If you are in an accident while using the company car to run personal errands, even if it’s during your regular business hours, you may be personally liable for any injuries or property damage to others, even injuries to co-workers who might be goofing off with you.
Independent Contractor: Using your personal car on behalf of the company, like for pizza deliveries, may not protect you from personal liability if you are in an accident while on the job. If you lease a company-owned vehicle like a taxi cab, your contract could have language that makes you liable for any accidents involving the vehicle.
Non-Business Activity: Having a company vehicle is an awesome perk, you probably use that vehicle 24/7. However, you are probably not indemnified if you cause an accident while using the company vehicle to commute to and from work, or while on personal or recreational travel outside of business hours.
When You Need an Attorney
Accidents can happen to the best of drivers. If you have been in a car accident while working, it is normal to be upset and anxious, especially if other people were badly injured. If you or a loved one has ever been in a similar situation contact a HMG Lawfirm attorney at (361) 882 – 1612 or visit our website at HMG Lawfirm.