What to Do if You're in a Car Accident with a Company Car
Understand who’s liable in a company car accident and how claims get resolved
By Andra DelMonico, J.D. | Reviewed by Canaan Suitt, J.D. | Last updated on May 21, 2024 Featuring practical insights from contributing attorney Justin W. PimentaUse these links to jump to different sections:
- Understanding Liability and Who Pays for Damages
- Who Is Liable for Company Auto Accidents: Me or My Employer?
- Who Pays Damages for Company Car Accidents?
- What Should I Do if I’m in a Company Car Accident?
- How Are Company Car Accident Claims Resolved?
- Will My Employer Hire a Lawyer for Me if I’m Sued?
- Will an Accident in a Work Vehicle Impact My Personal Insurance?
- Can You Get Fired for Crashing a Company Car?
- Find an Experienced Personal Injury Lawyer
Driving a company vehicle comes with great responsibility. Your employer is entrusting you with the responsibility of operating a motor vehicle while acting as a business representative. Unfortunately, the more time you spend on the road, the greater the risk of getting into an accident. While you can drive defensively and carefully, you can’t always control the driving conditions or other drivers. Knowing what to do when you get into a motor vehicle accident with a company car can help ease your stress should it happen to you.
Understanding Liability and Who Pays for Damages
Because the driver of the company car is working on behalf of an employer, the issue of liability gets more complicated. There is no clear-cut answer to who is liable because it depends on the facts of the accident.
The driver of the vehicle could be liable. It could be the company that hired the individual to drive the vehicle. If the company hires a fleet maintenance service, this company could be liable. If the company carries cargo for clients, the client could be liable if the cargo caused the accident. Even the vehicle manufacturer could be liable if a manufacturing defect caused the accident.
Justin Pimenta, who represents personal injury clients for Abrahamson & Uiterwyk in Florida, discusses an employer’s potential liability. “The law says that if you’re in the course and scope of your employment or if you’re not in the course of employment but are still in a company-owned vehicle, the company is vicariously liable.”
Who Is Liable for Company Auto Accidents: Me or My Employer?
Several factors are considered when determining liability in a car accident lawsuit. Typically, the drivers are the ones who are potentially liable because they were the individuals in control of the vehicles at the time of the accident. However, when a company car is involved, the employer could also be liable because one driver was acting on the company’s behalf.
Vicarious Liability
Vicarious liability—also known as respondeat superior—allows a company to be held liable for its employees’ actions. For vicarious liability to apply, the employee must be acting within the scope of their employment at the time of the accident. Several factors are considered to determine this. For example, what are the company’s normal operating business hours and the employee’s working schedule? If the employee is driving outside these times, it is less likely that they acted on the business’s behalf.
Another thing to consider is where the employee is coming from and going. If they are running personal errands, they are not acting on behalf of the company. This can be minor, such as a five-minute detour. If the accident happens during this detour, the company may not be the responsible party.
The type of professional relationship is also considered. You need to have an employee/employer relationship. A client relationship that an independent contractor has with a business does not qualify for vicarious liability.
Finally, the activity you were doing at the time of the accident is considered. If you commit a crime, your employer will not be liable for your actions. Drunk driving is a crime, making it an example of a possible crime that could eliminate vicarious liability. Similarly, if you are doing something or going somewhere and your employer told you not to go, you eliminate vicarious liability by acting against your employer’s direction.
Who Pays Damages for Company Car Accidents?
The party that pays for the resulting medical expenses and property damage will change based on several factors. If the employee acted outside their scope of employment, they are personally liable. Their personal car insurance will be the entity that handles the claim. If they acted within the scope of employment, then the company is liable. The company auto insurance will handle the claim. If the other party is at fault, their car insurance will handle the claim.
However, there are caveats to this. Some states are “at-fault” states, where the at-fault driver’s insurance pays for the damages. There are also “no-fault” states, where each driver submits a claim for their damages to their own insurance company. The laws of the state will influence how the insurance claims are handled.
Pimenta discusses common situations in which a company wouldn’t be vicariously liable for an employee’s actions that caused a car accident. “I think the only time that would occur would be for criminal actions—DUI, for example. If you’re drinking and driving in a company car, you know you’re personally liable for any damages that arise. You would be personally liable for any intentional actions with the car, like if you ran somebody down purposefully or any kind of intentional tort.”
Workers’ Compensation Insurance
Each state has laws that outline how workers’ compensation is handled. In some states, injured employees in a company car accident can file a workers’ compensation claim. Workers’ comp pays for medical bills related to treatment of injuries suffered while working. Speaking with a lawyer about a possible workers’ compensation claim can help you determine if this is a possible compensation option for you.
What Should I Do if I’m in a Company Car Accident?
The priority at all accident scenes is to ensure everyone is safe and out of danger. Check to see if anyone needs immediate medical care. Move all vehicles and people out of the path of traffic. Notify law enforcement and wait for a police officer to arrive at the accident scene.
You will need to begin notifications once you are cleared to leave the accident scene. Let your company know that you have been in an accident. You may need to file a report with your company and the company’s insurance provider.
How Are Company Car Accident Claims Resolved?
Company car accident claims go through the same insurance claim and settlement negotiation process as accidents. The company may also do its own accident investigation.
Accident claims begin after the accident when the victim files a claim with the employer’s insurance company. The claim will list the accident injury and property damage suffered. The insurance company adjuster will research the claim and recommend a compensation offer. The employer’s insurance company attorney will then begin settlement negotiations to secure a fair compensation offer.
If an agreement can be reached, the parties will sign a settlement agreement, which ends the claim. If the parties fail to agree, the victim may choose to file a civil lawsuit. They will want to do this before the statute of limitations expires. That way, their ability to recover compensation is protected.
The civil legal process can be lengthy. The parties will go through a discovery phase, where they gather all evidence. This leads up to a trial, where the lawyers present their arguments in front of a judge or jury.
Will My Employer Hire a Lawyer for Me if I’m Sued?
When the victim of a car accident sues the at-fault party, the auto insurance company steps in to provide legal representation. This is one of the reasons you buy car insurance. The same process happens after a company car accident. The company’s auto insurance company steps in with legal representation when the accident victim makes a claim. This representation extends to cover you as someone who is covered by insurance coverage.
However, it won’t hurt to talk to a lawyer and have your own legal representation. The lawyers for the company can and will speak to you. You may not encounter any issues with their representation, except that at the end of the day, it is the company that is the client. The company is the one buying and paying for the insurance. This can create a conflict of interest for the lawyer when representing the company and the employee. Hiring your own personal injury attorney can give you an extra layer of protection. Your hired lawyer will advocate for your best interest.
Will an Accident in a Work Vehicle Impact My Personal Insurance?
Yes, getting into an accident in a company car can impact your personal driver’s insurance. Even though the accident claim goes through the company’s insurance, your name is still attached to the accident. The accident will go on your official driver record. When you go to buy insurance for your personal vehicle, the accident will show up. The insurance company will then adjust your premiums based on your driving history that now has this accident.
Can You Get Fired for Crashing a Company Car?
Yes, it is possible to be fired for crashing a company vehicle. However, getting into an accident doesn’t automatically mean you will be fired.
Several factors influence whether or not you will be fired. Look at your company policy that outlines how and when employees are punished for crashing a company vehicle. These policies could have a grading system that requires additional training, different duties, suspension, or firing. Some employees are protected because they have an employment contract or work for a union.
It also depends on how the company views accidents. Some have a zero-tolerance policy, while others may have progressively more severe consequences based on the severity of the accident and damages.
Find an Experienced Personal Injury Lawyer
If you’ve been in a car accident while driving a company vehicle, your company’s insurance should handle everything for you. Reporting an accident immediately to law enforcement and your company is important. Then, comply with the investigation to provide all relevant information needed. However, it can be reassuring to speak with a car accident lawyer. Having your own legal representation gives you a reliable source for legal advice. Look for a lawyer who has experience with accident cases involving company cars.
Visit the Super Lawyers directory to begin your search for an experienced car accident attorney. For more information on these legal issues, see our overview on available compensation types.
What do I do next?
Enter your location below to get connected with a qualified attorney today.Additional Car Accident Liability and Damages articles
- Proving Liability and Damages in a Car Accident Lawsuit
- How Is a Car Accident Settlement Determined?
- How Is Fault Determined in a Car Accident?
- Your Smartphone Can Be Evidence in a Car Accident
- Who Is to Blame for a Self-Driving Car Crash?
- When Car Accidents Cause Death: Can I Sue for the Deceased Driver?
- Navigating Reporting Requirements for Motor Vehicle Accidents
- Who Is Liable for an Uber/Lyft Car Accident?
- Who Is Liable In a Rental Car Accident?
- Determining Fault in a Motorcycle Accident
Related topics
At Super Lawyers, we know legal issues can be stressful and confusing. We are committed to providing you with reliable legal information in a way that is easy to understand. Our legal resources pages are created by experienced attorney writers and writers that specialize in legal content in consultation with the top attorneys that make our Super Lawyers lists. We strive to present information in a neutral and unbiased way, so that you can make informed decisions based on your legal circumstances.
Attorney directory searches
Helpful links
Find top lawyers with confidence
The Super Lawyers patented selection process is peer influenced and research driven, selecting the top 5% of attorneys to the Super Lawyers lists each year. We know lawyers and make it easy to connect with them.
Find a lawyer near you