Employers and business owners are already facing significant strain right now with the ongoing coronavirus pandemic, so the last thing you might want to then think about is your employer wrecking a company car.
However, according to Brian White, a car accident attorney in Houston, car crashes are on the rise, making it more likely you might face this situation.
So what happens next? What do employers and also employees need to know?
The following are some of the big issues to consider if you find yourself with a wrecked company car.
If You're the Employer, When Are You Liable?
As an employer, you may be held liable for an accident happening in a company car if your employee was driving for work under something called vicarious liability. Vicarious liability means that a party is at least held partially responsible for the actions of a third-party. The third-party can also share in the liability as well.
Employers can be held liable for the negligence of their employees if the employee is working within the scope of their employment or job duties.
If your employee is a truck driver and they're delivering something during business hours and fail to stop at a red light, hitting another car or a pedestrian, the employer may be liable.
This wouldn't be the case if the employee were committing a crime, however, which is detailed more below.
The biggest stipulation here is that the employee has to be within the course of employment. Their activities have to be either directly authorized by the employer or so closely related to something that the employer authorizes that the employer should be held responsible.
The same legal concept can be applied if an employee uses machinery or heavy equipment negligently and causes personal injury or property damage.
Vicarious liability essentially says that even if you aren't the person who commits a certain act, you're liable because you're responsible for the actions of your employees while they're at work. It's meant as a way to reduce the harm that comes from employee actions.
Situations Where an Employee Could Be Liable
There are a few situations where an employee could be liable for an accident in a company car.
One example is if the employee was doing a personal errand, even if it's during work hours. The other exception to vicarious liability in these situations is if an employee is committing a crime when they're in a car accident.
Also, even if a commute is done in a company car, employers usually aren't responsible for accidents that occur during this time.
What If Your Employee is Injured?
If your employee is injured in a car accident while they're driving or work, you'll likely be responsible for covering the costs of said injuries via workers' compensation. Workers' compensation will cover lost wages and medical bills, although for coverage to apply, the injuries have to be work-related.
The general rule of thumb as far as workers' compensation is that if you are injured while driving for work-related reasons but you're away from your workplace, you may be covered. However, if you're commuting to and from work, you will generally not be able to collect workers' compensation benefits if you are in an accident.
Similarly, as an employer, you likely have collision coverage for employees, but not every employer has this.
You should as an employer, be aware of what type of accident policy coverage you have for work vehicles.
If you have a policy for company vehicles, even though it may be in your company name, it will likely cover damages caused by your employee.
However, if an accident leads to damages or injuries that aren't covered, the responsible party may have to pay. This means that it becomes very important to determine fault if an employee is in an accident. If your employee was using the car for valid work purposes, you are likely going to be the one who has to pay.
Workers' Compensation Claims vs. Personal Injury Claims
If another person causes an employee's car accident while they're working, the employee may be able to file a personal injury claim against the at-fault driver. That could mean that they would potentially receive compensation for their medical bills and other losses associated with the accident.
There are significant differences between workers' compensation claims and personal injury claims, though.
First, there are differences in the damages that can be recovered if you're the injured employee.
For example, with worker's compensation, you will typically receive payments only for measurable losses, including income and medical bills, and there are maximums. You can't receive compensation for something like pain and suffering from workers' compensation but you can for personal injury.
Another distinction between the two types of claims is the concept of fault.
If you bring a personal injury claim against another driver, you have to show that driver caused the car accident.
With workers' compensation claims, you don't have to prove anyone was at fault or caused the accident. Even if the accident was your employee's fault they can still typically receive workers' compensation as long as they were doing a work-related activity.
Can You Fire Your Employee?
There can then become another question that arises for you as the employer-can you and should you fire an employee who's in an accident?
If you feel that your employee's behavior caused the accident or violated company policies, you can fire the employee in most states, where employment is at-will.
The best thing you can do to protect yourself as an employer is to make sure that you have strong insurance coverage. Otherwise, if your employee is in an accident, even if they're not driving a company car but they're driving their own car during the course of the job, you may be the one who ends up being financially responsible for damages or injuries.