If your company has employees driving either company owned or employee owned vehicles in the course of their duties depending on the circumstances your firm may be held liable for their negligence. Given the potential damages of a catastrophic accident it’s important that your company has sufficient insurance to cover this situation. Without proper insurance your company could be responsible for paying for your legal defense, settlement amount or damages awarded at a trial.
If you have employees driving their own vehicles for company purposes you need to review your coverage. If such a company related errand or delivery is done in a vehicle not owned by your company and an accident occurs your insurance may not cover it. Most business owners have a general liability policy. It’s a common myth this policy will cover anything and everything that could result from business related negligence but most of these policies do not cover car accidents.
There are several potential causes of action that could be filed against you.
- The legal doctrine of ‘respondeat superior’ means that an employer can be held responsible for the negligent acts of an employee if he or she is acting within the scope of his or her employment. The reasoning is the employer is exercising some control over the employee while the employee is doing his or her job. This can include actions taken by an employee driving his or her own vehicle or one owned by the company.
- Another legal doctrine impacting such a situation is that an employer has an obligation to defend legal claims against an employee who is acting within the scope of his or her job. If the employer fails to do so the employer can be sued by the employee to get a court order mandating the defense or to pay the employee’s legal bills.
- Discuss with your insurance agent your current coverage and what it covers and what it does not. Many insurance carriers sell non-owned vehicle policies if your employees drive their own vehicles when working for you.
- Get the driving histories of all employees who drive as part of their jobs and find someone else to drive if an individual has a history of infractions or accidents.
- Create and enforce policies about safe driving. Employees should not drink alcohol or use drugs before driving for the company. Phone use and texting should be prohibited while driving. Speeding, traffic infractions and reckless driving while on the clock should result in disciplinary action. Without these policies and their enforcement another cause of action against you could be negligent supervision of your employees.
- While you have these rules don’t assign your employees tasks with such short deadlines they need to speed to get where you want them to go in time. If you call or text them while you know they’re on the road don’t complain if they don’t pick up.
There are many situations that may result in liability for injuries for business owners. If you have any questions about your potential exposure contact our office so we can talk about your operation, how the right insurance can help protect you and steps you can take to reduce your legal risks.