An employee runs a work-related errand in their own vehicle and gets into an accident. Who is liable – you or the employee?

If you’re like most employers, you probably assume that the liability lands on the employee. After all, the vehicle is not owned by the company. But you may still be on the hook for liability.

Depending on the severity of the accident – and where the fault lies – the victim may seek compensation for: pain and suffering, lost wages, medical costs and disability.

There are few situations in which you, the employer, may be held responsible for the accident caused by an employee while running company errands or completing work-related tasks off-site.

Negligent Supervision

Negligent supervision is one way an employer might be held liable for employee accidents, but this applies primarily to company vehicles. Employers are responsible for ensuring they have safety policies in place and that company employees are following those policies.

If you have company truck drivers, it is your responsibility to make sure your drivers are following logging requirements set by the state and federal government. Cargo must be properly loaded and weighted. If you fail to ensure that your drivers are following the law, you would be held liable for negligence.

Vicarious Liability

In the case of vicarious liability, the liability of your employee would fall on you while he or she is performing company duties. You may be held liable for your employee’s negligence while working, or even while traveling for work purposes.

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In this case, victims can sue you for damages caused by your employees while on the job. If an employee drives to the bank for the company and gets into an accident that causes injuries, the victim can sue your company for damages.

Because your company is likely to have more money than the employee, the victim may choose to sue you – not the employee – to get the highest award possible in the lawsuit.

Employee’s Private Insurance

The employee’s own car insurance policy can and will cover the damages or injuries in most cases.

But if there isn’t enough coverage to cover the damages, you may be next in line to fill the gap. This is a common scenario when there are multiple accident victims or an expensive vehicle is involved. In this case, you might be held liable for the damages your employee’s insurance policy doesn’t cover.

To protect yourself, add employees to your business auto policy as “employees as additional insured.” Yes, this will come at an additional premium, but it is worth the cost for the extra protection it offers.

When Employers are Not Responsible

There are a few scenarios in which you may be held liable for damages, but there are plenty of situations in which you won’t be held responsible. These include:

  • Employee Commutes: If an employee gets into an accident while commuting to or from work, you would not be held liable.
  • Damage to the Employee’s Vehicle: If the employee’s vehicle is damaged in an accident, you would not be responsible for damage to the vehicle or the cost of the deductible.
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