Company Car Accident: Who Pays?
UPDATED: July 22, 2020
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The least you should know...
- An employer's company car accident policy will pay for damages and injuries caused by an employee in a covered accident while driving a company car.
- Employees, however, may be liable to pay damages for an accident in a company car if they were driving outside of their scope of employment and were at fault.
- Accidents in a company car driving to and from work may be considered driving outside the scope of employment.
- If behavior leading to the accident was reckless or violated company rules, the employee can be fired for a car accident in a company car.
Having access to a company car can be a privilege, but sometimes it can be a burden. This is especially true if an employee has an accident in a company car.
Is the employer liable for an employee's car accident?
Can the employer make the employee pay for the accident?
Typically, the company has insurance to cover work-related accidents in a company car. Unfortunately, employees can be the ones who pay for an accident in a company car if they were on personal business and were at fault.
Understanding who is at fault in a car accident can be complicated. Understanding who is responsible in a work-related car accident is often even less clear.
You should speak to a car accident lawyer to understand your potential exposure if you're involved in a work-related accident in a company car. To find a car accident attorney near you, enter your ZIP code in our search tool now.
The Company Vehicle Accident Policy Coverage
Most employers ensure the vehicles that they provide for their employees to use. Even though the company vehicle accident policy will most likely be in the employer's company name, the insurance company will pay for damages caused by an employee in a covered accident, including damages to the injured driver, passenger, pedestrian or cyclist.
But, if the accident results in uncovered injuries or damages, then the party responsible for the accident will be expected to pay. That means determining who is at fault may be critical whether you're driving a company car or when a company car hits you.
Whether an employee has liability for an accident in a company car depends on how the employee was using the car. If the employee got in the accident on employer business, the employer pays for the damage caused by the accident. On the other hand, if the accident happened when the employee was not acting within the scope of employment, then the employee may be required to pay the company back for whatever it pays in damages or for injuries.
Employee vs. Employer: Responsibility after an Accident
When discussing accident damage and fault involving employers and employees, most judges and lawyers apply the principle of respondeat superior. This means that employers are generally responsible for the actions of their employees, as long as an employee is acting within the scope of employment. Defining “scope of employment” can be difficult.
Most states accept that if the employee is performing work-related tasks while driving the car, the company is responsible for insurance-related matters. If the employee is acting within the scope of his or her employment, the employer cannot force that employee to pay any damages related to the accident.
On the other hand, if the employee is driving the company car on personal business, the respondeat superior principle does not apply. If the employee is running personal errands or commuting to or from work, the employee is liable for the accident.
There are several other factors that will influence which party is liable for an accident in a company car. For example, the company may have a car policy or contract that either makes it liable or excludes it from liability in the event of an accident.
The state in which the accident took place may also affect the liability determination. Different jurisdictions have different rules about liability. The laws and facts will determine whose insurance pays if you get in a rear-end accident.
The terms of the insurance policy will play an important role as well. Some companies purchase collision insurance to cover employees, but that coverage may be limited or restricted according to certain factors.
Company Car Accident and Personal Insurance
You may be wondering: "If I damage a company car do I have to tell my private insurer?"
Not necessarily because, as explained above, the company's vehicle accident policy will cover the damage relating to a company car accident.
That said, you should always be truthful when your insurance provider asks about your driving and accident history, especially since the company car accident may show up on your driving record. Having any accident, including an accident in a company vehicle, could affect personal car insurance.
Car Accident Liability and At-Will Employment
If reckless conduct caused the accident or the behavior leading up to the accident violated company rules, the employee can be fired for a car accident in a company car.
What happens if you lose your job because of a car accident?
In most states, employment is at-will. That means an employee can quit or be fired at any time if there is no employment contract or policy that says otherwise. If you are fired for an accident in a company car, you may want to ask your boss or supervisor to fully explain the company's position and how they made that determination. You should also consider talking to an employment lawyer to see if your termination was wrongful.
To determine liability, the courts will always need a careful recounting of the facts regardless of the type of accident. Even if the accident involves a company car, it is important that the driver remember the basic details of the event.
If you are involved in an accident, make sure you obtain the other driver’s license number, insurance policy information, and a police report. If there were witnesses, collect their contact information and any statements they may be able to offer. Providing all available information will give the court a clear path forward when determining liability. This can make the situation easier for the employer and employee.
You can find our ultimate car accident checklist here; it can help you remember all the information you should gather in the excitement right after the accident and later.
It's good to know that the employer's insurance pays for damages and injuries if you're in an accident in a company car.
Of course, the caveat is that to be covered, the accident must have happened while the employee was driving for work-related business.
If you were in an accident while driving a company car, or if someone hit you while driving a company car, an accident lawyer can answer questions about who pays. If you need to find an attorney near you, enter your ZIP code in our search tool to find experienced car accident legal help near you.