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Accident in a Company Car: Who's Liable?

By Betty Wang, JD | Last updated on

You might know what happens if you get into a car accident, but what about an accident in a company car? Are you liable, or is your boss the one who'll have to pay for the damage?

Many jobs entail driving as either a primary or secondary task, or simply require that employees have a valid driver's license to run the occasional job-related errand.

So what happens if you get into an accident while driving a company-owned car?

There's no hard and fast rule. It really depends on a number of factors. For example:

Employer Liability

Under the doctrine of respondeat superior, employers are vicariously liable for the acts of their employees when those acts occur during the course of employment.

This means if you're in a car accident while driving a company car, your employer's liability turns on whether or not you were acting in the course of your employment.

If it's not obvious that an employee was clearly acting in the course of employment (i.e., performing regular job tasks in driving the vehicle), then courts generally turn to the question of whether or not the employee was on a "frolic" or "detour."

Frolic v. Detour

A detour occurs when there's a slight deviation in an employee's acts that still falls within the scope of the job and therefore makes the employer liable. An example of this would be if an employee is driving a company car to meet a client, but takes a slight detour to get gas and then gets into an accident.

A frolic, on the other hand, is when an employee has deviated enough from the scope of his employment that the employer is absolved of liability. An example of this would be if an employee borrows a company car, after hours, to meet his friends at a bar. If he gets into an accident, this can constitute a frolic. The employer would not be held liable.

What About the Other Party?

The same "frolic v. detour" question would apply even if the other party involved in the accident is completely at fault. Even if the other party accepts responsibility, a frolic or detour test can still be used to determine whether the employee or the employer should receive insurance claim notifications and other relevant documents to settle the claim.

Because liability for accidents in company-owned cars can get complicated, you may want to consult an experienced personal injury defense lawyer if you're ever sued over an accident that you feel should be your employer's responsibility.

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