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How to Protect Your Business from Car Accident Suits

By Edward Tan, JD | Last updated on

When you run your own company, lawsuits can pop up out of anywhere. Nowhere is this more true than in businesses that require you or your employees to drive. Car accident suits can put a huge dent in your bottom line, but there are ways to protect your business.

From 2003 to 2009, over 1,500 workers died each year from driving-related accidents, according to the U.S. Department of Labor. On average, on-the-job fatalities can cost a business over $500,000. Nonfatal accidents usually result in about $74,000 in losses.

So what's the best way to prevent your company from going under due to a car accident lawsuit? Here are five things you can do.

Get an Umbrella Insurance Policy

If your business requires any sort of employee driving, it's a good idea to get an umbrella insurance policy. These policies are known as "gap fillers" because they usually cover accident situations that normal policies don't, such as lawsuits. And when you're entrusting an employee to drive for your company, it's best to provide for as many contingencies as possible.

Proper Car Maintenance

A poorly maintained car can cause just as many accidents as a bad driver. Bring in your company vehicles for regular check-ups and be sure to comply with any applicable standards required by your local laws.

Check Driving Records

Negligent hiring is a civil action in which an employer is sued because they hired an unqualified employee. If you don't want to be on the receiving end of this type of lawsuit, than remember to check the driving records of potential hires. You'll be able to weed out the good drivers from the bad.

Incorporate Your Business

While incorporating your business won't prevent your company assets from being taken in a lawsuit, it will protect your personal accounts. Becoming an LLC or corporation could literally keep you out of the poorhouse.

Don't Overwork Your Drivers

No one is more prone to car accidents than a tired driver. While fewer employees might be easier to manage, it might also end up costing you more money later. Hire additional drivers if you need to and keep you workers happy and fresh. That's the best way to protect your business from car accident lawsuits.

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