Your Employer Is Liable In Any Accident In A Company Car, Right? Not So Fast!

Companies will often offer perks to their employees to make the job more attractive. If you are offered a company car, it can be a huge benefit. Without having to pay for the maintenance of your car and (sometimes) the gas, company cars can have major economic benefits for someone who spends a lot of time on the road, either commuting or traveling for work.

What seems like a perk, however, can quickly turn into a financial nightmare if you aren’t sure what your responsibilities and liabilities are when driving a company-owned car. If you are in an accident, it would seem reasonable that the employer is liable — but that might not be the case. There are situations where you might be left holding the liability bag. It is important for you to know what your vulnerabilities are when you get into a company car.

Vicarious liability is a law that means that the car’s owner is liable if someone borrows the car and gets into an accident. But when it comes to company cars, there are stipulations and certain conditions where the employee is held responsible for their actions. There are times when vicarious liability will not cover you if you are in an at-fault accident.

Vicarious liability

In most instances, if you are driving in a company car, your employer will be liable for any damages that result from an accident due to “respondeat superior,” which is old English for “vicarious liability.” Under this law, employers who let their employees drive a company vehicle are held liable for any negligence by their employee, but only while the employee is engaged in the scope of work-related activities. The “scope of work activities” definition is where things can get a little complex.

For example, if you are a truck driver delivering materials for your company, and you get into an accident where you are at fault, then your employer would be liable for any resulting damages or injuries due to vicarious liability. If, however, you are a truck driver and you decided to run a personal errand on the way back from making a delivery, and you got into an accident, then you would be liable because you would not be engaged in work-related activities as outlined by the scope of your work position.

The definition of work-related activities means that they have to be either an activity that was authorized by an employer, or related to an activity authorized by an employer, for the employer to be held liable. It is also important to know what type of insurance your employer has. If your employer has collision insurance then you would be covered as an employee, but if they don’t, then the onus may rest with you. That is why before you get behind the wheel of a company car, you have to know what your employer’s insurance allows and what type of coverage they have.

Criminal activities

Another way an employer’s responsibility might be negated is if the negligent employee driving the company car was engaging in a criminal act at the time of the accident. Imagine that same truck driver decided to have a couple of drinks before they drive the company car and they get into an accident on the way to their delivery. Because they are breaking the law by driving while intoxicated, the employer would no longer be liable for their negligence.

Although company cars sound like a huge perk — and they can be — it is important to know your responsibilities and what type of insurance your employer is carrying before you get behind the wheel. It is good to seek out advice from a third party like a Boston car accident lawyer, who can really help with the legalities of the company car. If you take out your own insurance policy  it will ensure that you are covered either way, but it is important for you to know if you have to insure yourself or not before you accept the use of a company car.