Possible Liability When Employees Use Vehicles In Your Business
By: Kathleen Murray (Capstone Brokerage, Client Advocate) October 9, 2014
If your employees use business vehicles, or your personal vehicles while they are working for you, you must understand your liability for having employees use your vehicles and what you can do:
Auto exposures can create some of the biggest and ghastly losses facing companies whether a large corporation or small business. Business owners who wouldn’t think of allowing employees to operate dangerous machinery or their children to drive their personal auto without safety rules and policies in place allow these scenarios to happen and usually with unbelievable consequences. Commercial auto collision incidents in this category are becoming more frequent and continue to rise incurring legal expenses and potential personal hardship for the employer and the employee.
If one of your employees is involved in an accident while driving a company vehicle and a victim of the accident sues, the victim’s attorney will most likely make one or more of the following arguments for holding an employer liable:
• Respondeat Superior
• Negligent hiring or retention
• Negligent lending of a vehicle
• Negligent maintenance of a vehicle
Since Respondeat Superior is the strongest assertion in civil suits, the seriousness of this legal term is given priority in this article.
Understanding Respondeat Superior Liability: Respondeat Superior is a term that will be used in a civil action against the employer and the employee. Unlike some of the liabilities of having employees use your vehicles, you face respondeat superior liability even if your employees get into accidents while driving their own vehicles. Respondeat Superior Liability can come into play in any unfortunate incident. Whether an auto or commercial liability suit. Of the four, Respondeat Superior is the most challenging for a defendant.
Respondeat Superior: The phrase respondeat superior is a latin term that lawyers use in civil suits. The term may be “translated” as:
• If your employee is at fault for an accident (or an incident); and
• Was doing work for you at the time of the accident/incident (lawyers will often refer to this as “acting within the scope of employment”; then
• You may be held liable for damages arising from the accident/incident
What An Employer Can Do to reduce the Likelihood of Successful Claims:
• Take steps to ensure that vehicles are adequately maintained and have documentation procedures in place when incidents occur:
~ Incident Report form for immediate submission by driver;
~ Disposable cameras in vehicles at all times for pictures at all angles of the vehicles and accident location to be taken immediately.
• Obtain and Maintain adequate commercial insurance on all vehicles especially Hired and Non-owned coverage in addition to liability. Ask your insurance agent for recommended vehicle safety programs or to assist with implementing a monthly safety program.
• Establish vehicle policies that instruct employees to report any and all problems with company vehicles immediately and direct them not to drive any vehicles in an unlawful or patently unsafe condition.
• Having the right vehicle policy in place sets forth the restriction for using company vehicles, which is of great importance to reduce respondeat superior liability. If the company policy prohibits employees from using business vehicles for personal use, (example: the employee stopped at the grocery store or other locations for personal errands), it makes respondeat superior somewhat easier to argue on the employer’s behalf.
• Use Firm, positive language in the Company Vehicle Policy: Unless your employees take your vehicle policy seriously, it doesn’t do any good. Be prepared to enforce your vehicle policies by disciplining employees.
• Prohibit illegal use about using vehicles while under the influence of alcohol or drugs that would impair driving.
• Require notice of legal drug use. To reduce the chances of a successful Negligent Lending of a Vehicle claim, consider a No Tolerance provision in the company policy that will alert you when a driver is under the influence of any drug, (even over the counter allergy drugs) that will cause drowsiness, and impairs driving.
• Personal auto insurance coverage. Whatever the situation, make sure all employees have personal auto insurance coverage. Discuss the recommended limits with your insurance agent when reviewing your commercial auto policy and drivers added to the policy.
• Be sure that all employees who use company vehicles have all licenses and permits required to operate the vehicles that they use before submitting to the insurance agent for driver approval on your commercial policy.
Do not hesitate to check with your insurance agent to assist with questions or concerns about commercial insurance coverage and safety recommendations
