Does your heart skip a beat when one of your employees jumps in their vehicle during work hours? Sometimes it doesn’t matter if their job involves a car or if someone is just running down to the post office to mail something important. If an accident occurs, then employer liability can get questioned.
If the driver of the car, truck, bike, or other vehicle is on the job, then it’s likely that the employer is liable for injuries that result from an accident where the employee is at fault. It’s not uncommon for a business to get sued for their staff’s negligent acts while working off-site. Compensation can even apply if they get hurt outside the premises while they’re on the clock. The situation gets more complicated once insurances exchange hands. If you’re wondering where you stand as an employer, then read on to get a full understanding of where your liability starts and ends.
Was the Employee on the Job?
Determining whether your employee was on the job or not isn’t a simple yes or no question when it comes to employer liability. Every time someone is performing any duties related to work, that individual is on the job. This is true even if they’re also running personal errands and driving their own car. For example, if your staff member is completing personal tasks on their lunch break, then this is not considered work-related. But if during the course of their break, they pick up or drop off an item that is work-related, then this driving trip is considered on the job.
When your employees are traveling to and from the office, they’re not considered on the clock. This even applies if they’re driving a company vehicle. It is classified as on the job, though if they need to make a work-related stop during their travels or have to go to another site related to the business.
What Is Vicarious Liability?
One of the phrases you might start hearing after an employee has an accident is vicarious liability. It puts the liability of a staff member on you when that person is serving the company. This means the business is liable for the negligent actions of the employee. This loophole gives the victims the right to sue companies for the damage their staff members have caused while on the job. It’s common for victims to sue an employer as opposed to the employee. This is because they often have a higher chance of getting more financial compensation.
Vicarious liability is not always an open and shut case, though. They must prove that the driver who was at fault was working when they caused the accident. It also doesn’t matter if the employee was driving their own car or not. As an example, let’s say that a pizza delivery person causes a car accident. It’s likely that vicarious liability would apply to this situation. But what if the same driver was visiting their partner on their way home from work and became involved in an incident? It’s unlikely the employer would be liable.
What Is Direct Liability?
In addition to vicarious liability, another claim that can get raised against you as an employer is direct employer liability. But, this claim also requires proof by the victim. Some of the common theories that can get raised are negligence in hiring, supervision, training, entrustment, and inadequate maintenance. So, for example, there would have to be proof that a driver got the job despite their unsafe record. It could also relate to internal policies round delivery times that encouraged the employee to speed and ignore road rules.
In these situations, your policies and procedures will get examined and investigated. This can include interview notes and maintenance guides for vehicles and equipment. Therefore, it’s important to maintain up to date records on your employees and policies.
What Is the Employer’s Liability for Car Accidents?
If your staff member has car insurance, the good news is that it can cover the damages and injuries. But issues can arise when they don’t have enough coverage to compensate everyone involved. This mostly occurs when there are several victims involved in the vehicle accident. When these damages get added up, you can see if the employee’s policy will cover the damages. But if it can’t, then it’s likely to result in a vicarious employer liability decision.
You can protect your company by ensuring you have the appropriate cover on your business vehicle policy. Additional insurance can add beyond what your employee’s coverage offers. This allows your staff member’s insurance to be used primarily, and the company’s to cover any of the remaining damages.
Can Insurance Companies Assist?
Instead of trying to complete the investigation on your own, you can leave it up to the insurance companies to answer all the questions that need asking about the accident. However, your driver needs to have personal liability car insurance coverage if you want to take this route. You can send a notice of the accident to your business insurance company and to your staff member’s provider. They will then work out who will provide the primary coverage for any damages from the accident.
The most significant question that can come from their investigation is if the employee was working or not. If the matter becomes too complicated or heated that neither party can agree on the issue, then it’s best to get legal professionals involved for a ruling.
How Does Workers Compensation Work?
While it’s important to concern yourself with the victims involved in the accident involving your employee, it’s essential not to forget that your staff member may also need compensation if they’re injured. Your people could be eligible for worker’s compensation if they got hurt while driving their personal vehicles for work reasons. Their coverage will pay for injuries up to the insured amount they chose in their policy. Once they’ve exhausted these finances, the worker’s compensation would cover further medical bills and any lost wages.
How long an employee can stay on worker’s compensation can vary from state to state. It will also depend on the type of claim that gets filed. The most common time period is three to seven years, but there is no time limit involved if the accident results in permanent disability. If they want to return to work, there are criteria they have to meet before they can clock in. When they feel ready to come back, a physician must enter a Notice of Ability to Return to Work letter. This provides clearance to return to work with limitations and restrictions. The letter doesn’t force the staff member to return, though. They can only come back if the recommended work fits the restrictions that the practicing physician has described.
When Is an Employer Not Responsible?
Not every accident that occurs with your employee and a vehicle or item results in your business having to pay damages. It’s important to know where your employer liability starts and ends. For starters, an employer is not liable for their staff member when they’re commuting to and from work. If that employee had an accident while attempting to complete a work errand before they arrived at work, then they could make a claim. But if they finished a task, then made their way into the office and had an incident, then you would not be liable.
Any accidents that may occur within an employee’s work hours would be considered your responsibility. That is unless they are running personal errands that don’t involve work duties. You also are not liable for damages that occur to the employee’s vehicles. It also doesn’t cover the costs of their deductible. Some companies will choose to assist with these expenses, but this employer liability is at your discretion. Generally speaking, you are not obligated to cover any of the costs involved.
What Else Should You Know as an Employer?
Whether it’s understanding employer liability or finding out the benefits of employing a property management company, there’s a lot to learn about when you’re starting up a business. The Startup Magazine is a fantastic resource that can inspire and educate you no matter what stage you’re in as a business. We share stories and journeys from new and successful entrepreneurs who have overcome the challenges their businesses have thrown at them. Our hope is that you can learn from their experiences to prepare you for your journey. Stay tuned to this blog for all the latest articles and resources to help you become a successful employer and business owner.