Liability for a Company Car

Great news- you have been given a company car! With that large expense your company is now taking off your shoulders, you might now have some extra cash that you can use at your discretion. That company car may also provide a valuable benefit for families with children since transportation has just become more accessible. All of these value added benefits may be buzzing around your head, which is great! However, there are a few things about company car liability you should know, and the most concerning issue is who takes responsibility if you are in a car accident.

Who is Responsible?

Potential damage and injuries resulting from a car accident are always discussed between employees and employers. In a lot of cases, company car liability is placed on the organization. Employers are held responsible for the actions of their employees, if they are within “scope of employment,” meaning when they are performing work related tasks while driving. Employees become liable for car accidents in company cars when they are driving on personal business.

This sounds pretty straight forward, but there is a lot of gray areas surrounding the company car liability. The major discretion comes from how the employee was using the car during the time of a car accident.

Determinants

1. Insurance: If the car is insured, the insurance company will pay for certain damages. Most of the time, an auto insurance policy will be in the company name

2. Commuting: Some suggest that commuting to and from work is not technically within scope of employment since is it outside working hours. Therefore, if an employee is in a car accident while commuting to work, he or she would be liable for any company car damages or personal injuries.

3. Acting in course of employment: Although an employee might be acting in scope of employment while driving a company car during work hours, there are still questions raised that can further determine the company car liability. If an employee is meeting with a client in the company car, but runs an errand in between meetings that isn’t relevant to work, the employee may be held liable. This idea is further described as “frolic”, as opposed to “detour.”

What to do if you are in a car accident?

If you were in a car accident, it is important to consult with a personal injury lawyer immediately. As you can see, determining liability of a company car can be complicated, but a personal injury attorney can help you through the entire legal process.