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Who Pays For a Car Accident in a Company Vehicle?

Imagine you’re driving along in your company car, obeying all speed limits and rules of the road when suddenly you’re hit. Are you liable for paying for any repair costs? What happens if you’re injured?

Who Was at Fault?

The first step to answering these questions is to determine who, exactly, was at fault for the accident. If it was the other driver, then your company will need to file a claim with the driver’s insurance company. If you were injured in the accident while working, then your employer’s workers’ compensation insurance should be able to cover all of your medical bills plus a portion of any lost income if necessary. It’s also possible that you can file a third-party claim against the at-fault driver.

However, if you were at fault in the accident, the other driver will need to file a claim against you, or more likely, your employer.

Employer Liability

Oftentimes, an employer can be held liable for any expenses incurred in car accidents caused by employees, but only if the employee was actually on the job when the accident occurred.

This means that if you caused an accident during a work delivery, your company would most likely be liable for any damages stemming from the car accident.

However, if you were involved in an accident while driving a company car but it was on a personal errand , then it’s possible that your employer’s insurance carrier would determine that the employee is personally responsible for any damages related to the accident.

Were You on a Detour or a Frolic?

The difference between a detour and a frolic can determine liability for who pays. If it was a frolic, then you will most likely be liable. However, on a detour, it will most likely fall on the shoulders of your employer.

A detour is if you’re making a stop that is related to your job, such as stopping to fill the gas up in the vehicle and an accident occurs. While it wasn’t your overall job, it was still indirectly related to it. This means the employer will most likely be liable.

A frolic is a completely different task from your job that you happen to make in the company vehicle before or after a job, such as stopping to visit a friend after making a delivery. If an accident occurs while traveling to or from that friend’s house, then you are most likely liable for damages because that stop was not within the scope of your job.

Was the Company Vehicle Properly Maintained?

If an accident is caused by maintenance failure and the company is responsible for the maintaining it, then the company is likely to be liable. If it can be fully established that the accident was caused by the failure of maintenance, then you are free of liability.

Was the Car Insured by the Employer?

Typically, company vehicles are covered through the company’s insurance policy in their name. This means that the company is liable for any harm caused by a vehicle it has insured, no matter which employee was driving at the time. However, if the employee was under the influence or impaired somehow, the insurance company may dispute the claim and say the employee was acting outside the scope of work.

Was There a Contract?

Oftentimes, companies require their employees to sign a car contract when they’re issued a work vehicle. You should be sure to completely read and understand this contract prior to signing it because it may contain certain conditions that would render you liable in accidents; you should also obtain a copy for your records.

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