Does your business or nonprofit have a company car policy in place?

Photo credit: Styled Stock Society

There is nothing quite like the perk of driving a company car. It's one of the most generous perks an employer can offer. It's even more exciting when that perk comes with insurance and gas coverage, too. 

But what happens when you end up in an accident while driving the company car? 

Whether you are in a fender bender or a more significant collision, you need to know who's going to pay for it. Are you responsible for the cost? Your employer? The insurance company?

As an employee, always address these questions before you take the keys to the car. And if you’re a small business owner or nonprofit director, it’s important to have documentation and policies in place that employees agree to before you hand over the keys. (This is a great assignment for your nonprofit’s board of directors.)

Let's take a look at some of the rules that apply to having an accident in a company car. 

Vicarious Liability

Have you ever heard of vicarious liability? It means that your employer is liable for any actions of their negligent employees. For example, if you were to be driving in your scope of the job and you run a red light, hitting a pedestrian, your employer will be liable. Because you were working in the scope of your role, and you were not committing any crimes at the time of the accident, the liability rests with the company.

Your employer must have authorized your driving for this caveat to matter, too. Your employer would then be held responsible for your actions, and they would often have collision coverage that extends to employees, too. If you drive a company car, discuss this with your boss before you drive the vehicle. You don't want to take the responsibility of a company vehicle and end up in a legal battle.

In the worst-case scenario, a disagreement between a business and its employees over liability may result in legal action. Company vehicle policies are necessary for every type of business, especially when accidents are at play. Whether you’re a sales rep, truck driver, or business owner, having a truck accident lawyer or general liability lawyer is essential.

Criminal Activity

What about criminal activity? It's a question that often comes up, and we're not saying you'll be picking up a criminal after a bank robbery. However, if you take a client out for a meal and sink several bottles of wine, you will be putting yourself at risk and shouldn't be behind the wheel of a car. If you are and you crash, this won't be on your employer. You would have known not to get behind the wheel of the vehicle after drinking at dinner. Not only can your boss refuse to support you, but you also won't be able to get some help through worker's compensation because you are at fault and weren't acting in the scope of your job.

According to car accident attorney in St Louis, "a clear company car policy can protect both employees and employers from potential legal issues arising from criminal activity while using company vehicles."

Your company vehicle is designed for company business. If you're doing personal errands in a company car and have an accident, your employer wouldn't be liable for it. It's your personal risk at stake here as it's up to you to ensure that you can remain using your company car on company time as intended. 

Having access to a company car is considered a perk, and you can enjoy the use of a vehicle without the added stress of your finances being interrupted. Just be sure that everyone involved has the same expectations and understanding about how to handle the situation if something goes wrong.

Until next time,

Andrea

One Nine Design is a digital marketing company helping small businesses and nonprofits learn how to use their website and email list to grow their reach and make a bigger impact!