What Happens if You Get in a Car Accident in a Company Vehicle?

Company vehicles can be anything from a commercial van to a fleet vehicle to an ordinary leased car with a magnetic logo. What matters for driving and insurance purposes is whether your company owns and insures the car or truck, or if you do.

If you have a car accident in a company-owned vehicle, whether you were driving for business reasons or doing a quick errand on your own time also determines responsibility. Both the vehicle’s owner and the employee’s actions affect who pays for the damages after a company car accident.

Company Car Insurance Versus Personal Liability Insurance

Company auto insurance is not much different from personal car insurance. Both cover the driver and the vehicle according to state requirements. State laws may require a company vehicle to have higher per-person and per-accident limits. Business insurance may also have higher comprehensive coverage and higher uninsured/underinsured motorist protection.

After a company vehicle accident, insurance companies determine which driver was at fault for the car crash. If you are the driver, you should exchange insurance information with the other driver and present that driver’s insurance information to your employer’s insurer with the accident report.

If you are driving your own car while on company business, you may need to give the other driver your insurance information and any secondary insurance from your company, if they have a policy.

Employee Liability for an Accident

An employee driving a company vehicle is liable for an auto accident whenever they drive. Driving your employer’s car or truck does not relieve you of the duty to drive responsibly and obey traffic laws. If you were speeding, intoxicated, or violated other traffic regulations, you could be entirely at fault for the accident.

Employer Liability for an Accident

If the employee is responsible for the accident, the employer may still be liable under the legal doctrine of respondeat superior. Under this legal theory, an employer is responsible for the employee’s actions if the employee was acting within the scope of their duties. “Scope of duties” means that the employee is carrying out tasks assigned by their employer as intended.

For example, if a delivery driver has an accident while on their regular route, the employer’s insurance may cover the other driver’s damage. Taking a quick side trip to gas up the vehicle is considered within the scope of employment and known as a detour. If the driver takes the car on a road trip with friends, that is considered a “frolic.” The employer’s insurer will not cover any accidents that occur on a frolic. Company insurance does not cover personal errands or other unauthorized deviations.

Respondeat superior is a type of vicarious liability that makes an employer liable for an employee’s accident. Under this theory, if an employer gives authorization for a person to do certain things, the employer is liable for any harm that flows from those acts. If the delivery driver gets approval from their boss to run a personal errand in a company car, the company may be liable for an accident that occurs under the vicarious liability theory.

Who Pays for Damages After a Company Vehicle Accident?

In most cases, the company’s insurance will cover any damage to the work vehicle itself. This applies even if you were the at-fault driver and have your own auto insurance policy.

It’s possible you could get hurt while driving for your employer. If you are not at fault, insurance could pay your damages and medical bills in a couple of ways.

Workers’ Compensation

If you were on the job and driving a company vehicle, you may be eligible for workers’ compensation insurance if injured. Workers’ compensation benefits apply to all employee injuries arising during the course of employment. Workers’ comp pays for all medical bills and lost wages directly related to the accident. In return, the worker waives rights to appeal or sue their employer. Workers’ comp will not pay for the other driver’s injury or damages.

Personal Insurance

Unless you have something called “extended non-owned coverage” at the time of the accident, your personal insurance will not cover an accident in a company vehicle. If your job requires you to use your personal vehicle for company travel, you may want to consider this type of coverage.

Your personal insurance policy will cover property damage for your own vehicle if you are on your own time. If you’re not sure who should be paying for your injuries, consider speaking with a car insurance attorney.

Independent Contractors and Rideshare Drivers

In most cases, independent contractors will not be driving company vehicles. Contractors are not employees, and they must carry their own insurance for their vehicles. However, rideshare companies like Uber and Lyft have different requirements.

Under the laws of most states, rideshare drivers are independent contractors for wage and tax law purposes. Rideshare companies must have accident liability insurance for their drivers that kicks in once they accept a fare.

Depending on the state, rideshare drivers are responsible for their own accidents if they have not activated the rideshare app, or if they have activated it and are waiting for a request. The company’s insurance takes over when the driver accepts a passenger and when the passenger is in the vehicle. If you have an accident while you’re en route to a pickup, the insurance issue becomes more complicated. Many insurance companies provide rideshare insurance for rideshare drivers. Rideshare drivers should review their options with their agents and with a car insurance attorney.

Get Legal Help From a Car Accident Lawyer

If you’ve been in a car accident in your company car, getting legal advice from a personal injury attorney is likely your best option. Even if your accident is work-related, you will need assistance making your insurance claim for potential workers’ compensation and other claims.