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Employer’s Liability in Employee On-the-Job Auto Accidents

Employers liability

If you reimburse your employees for mileage, you probably want to know about employer liability in the unlikely event that your employee is involved in an auto accident.

When employees hop in their cars to run errands for work, employers might feel released of liability – out of sight, out of mind, right? Employees are in their own cars, for which they (better) have their own insurance. If they cause an accident, that’s their problem, right? Possibly, but sometimes, the liability falls on the employer.

  • Lawsuits can be brought against an employer for an employee’s negligent acts while working off premises
  • Workman’s comp can apply if the employee is hurt off premises while on the clock

Of course, when insurance is involved, you can bet it’s complicated so let’s take a look at how and when an employer can be held liable for employee accidents.

Vicarious Liability

Vicarious liability puts the liability of an employee on the employer while the employee is serving the employer. An employer can be held liable for an employee’s negligent actions while working (or traveling for work).

Vicarious liability gives victims the right to sue employers for the damage employees cause while on the clock. So for example, if an employee drives to the bank for her employer and injures someone in an accident, the victim could sue the employer for damages. Suing an employer is usually more lucrative than suing an employee so victims can use this law to get the most out of a lawsuit. Vicarious liability can be a nice loop hole to get more money, but it’s also an important protection.

The thing to understand here is that vicarious liability can make a company liable for something that happens off premises. If an employee drives somewhere for work purposes and gets into an accident and badly injures someone or smashes a Tesla, say, the employer can be sued to cover the damages that the employee can’t afford to pay.

Employer’s Car Insurance

So what about the employee’s car insurance? Shouldn’t the employee’s car insurance take care of any damages or injuries? Yes, it should and will in most cases. The problem arises when the employee doesn’t have enough coverage. This can happen when there are multiple victims in an accident. All of the victims’ judgements combined might cost far more than a normal policy covers and so the victims go to the next in line, the vicariously liable employer. The same might be true for damage done to an incredibly expensive car. If an employee totals a $300,000 car, the employee’s insurance probably wouldn’t be enough to cover it.

An employer should protect itself against this eventuality by adding the appropriate coverage to their business auto policy.

“The standard business auto policy provides no coverage for the employees that are sued even if the accident took place on company time… Most insurers will add “employees as additional insured” for a small extra premium. ” – Scott Simmonds

The extra insurance adds coverage beyond what the employee’s insurance covers. Having this coverage doesn’t mean that the employee’s insurance doesn’t get used in the case of an accident. The insurance follows the vehicle so if an employee was in an accident in their own car, their insurance is primary. The employer’s insurance kicks in if the employee’s insurance wasn’t enough to cover the damage.

Worker’s Comp

Employees can be eligible for worker’s compensation if they were injured while driving their personal vehicles for work related purposes. Again, if an employee was insured at the time of the accident, the employee’s insurance pays for injuries up to the covered amount. After that coverage is drained, the worker’s comp could cover further injuries or lost wages.

When the Employer is not Responsible

During a commute

When an employee is commuting to and from work, the employer is not liable for the employee.

If the employee stopped by Starbucks after running a work errand but before returning to work, they could not make a claim against the employer. Likewise, an employee could not make a claim against the employer if the accident happened after completing a work errand and heading home.

Damage to the employee’s vehicle

The employer’s liability does not include damage to the employee’s vehicle or the cost of the deductible.

Whether an employer chooses to assist an employee with these expenses is up to the employer but, generally, an employer can consider any of these expenses as a part of the overall mileage reimbursement.

 

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9 Comments

  1. Mark Schiffrinpa
    Mark Schiffrinpa May 26, 2017

    Following these blog ideas will help all the employees who faced auto accident case. It really helped me being an employee, Thank you for sharing ideas. Great post!!!

  2. rod andreassen
    rod andreassen July 25, 2017

    I had a special needs client cause an accident between my house and his, can I get me my employer to help pay my deductible?

    • Peggy Emch
      Peggy Emch August 2, 2017

      If it was an on-the-job accident, you should talk with your employer about it and ask them to help. If that doesn’t get you anywhere, try a lawyer, but from what I have read, the deductible is your responsibility.

  3. […] Vicarious liability puts the liability of an employee on the employer while the employee is serving the employer. An employer can be held liable for an employee’s negligent actions while working (or traveling for work). Vicarious liability gives victims the right to sue employers for the damage employees cause while on the clock. So, for example, if an employee drives to the bank for her employer and injures someone in an accident, the victim could sue the employer for damages. Suing an employer is usually more lucrative than suing an employee, so victims can use this law to get the most out of a lawsuit. Vicarious liability can be a nice loophole to get more money, but it’s also an important protection, explains TimeSheets. […]

  4. Charles
    Charles November 25, 2017

    A State or Federal law should be passed to clearly define “Vicarious Liability”. There are jobs that require an employee to travel a lot and its the employer’s responsibility that they are on their best behavior while on duty.
    However, employment contracts are written by the employer and they can insert a clause that would waive them of any responsibility.

  5. J.Kinish
    J.Kinish January 9, 2018

    This is all so very helpful in more ways than one and so thankful for this; but what if let’s say an employee drives for a medical transport company, client in route to appointment and while driving employers vehicle by no fault of their own another vehicle rear ends them. What then? Seeking medical attention at an immediate care office and refused care for not filing injuries under workmens comp. Office would not allow it to be billed under the car Ins company. Is this right? Can they do that? Does an employee have to file a claim under workers compensation for the car accident instead of a normal claim with the car insurance company? Also, the at fault drivers insurance company continuously calls as I have tried calling my employers Ins company with no luck in making contact. Employer as well as employers insurance company avoids any attempts I make at communication .

    Help, don’t have any idea what to do.
    Please and thank you. Have a blessed day.

  6. V Thimas
    V Thimas February 13, 2018

    My Son was woeking got in an accident and it was nit his fault – total loas the car. Now he is on Workers Comp. Broken hand, mental instability and all while supporting one hosp to another.

    I am concern because he jumps now while we drive him places.

  7. Plushin McCloud
    Plushin McCloud June 7, 2018

    I work for a huge company that send their employees out of town sometimes. 15 mins a pond arrival, after driving 2 hours away from home, A man with no insurance hit me totalled my brandnew car. My insurance just laps.? I’m on company time and now I have no transportation to and from work. I called a lawyer, but she still trying to compensate from the guy who hit me that has no job or insurance. Can I sew my company? Its not like I drive out my comfort zone…please help with advice. Thank you.

  8. Milissa
    Milissa September 19, 2018

    My employee cut through a private parking lot and hit someone without realizing and didn’t stop. My insurance denied their claim, am I going to be liable for the mountain of medical bills this caused?

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