Are employers liable for employees driving personal cars?

Chances are that you have employees driving personal vehicles for company business. You may or may not know that that your company could indeed be liable for accidents that take place within this so-called “grey fleet.”

Typically, companies are not at fault for anything that happens on the commute to or from work or while on personal errands. However, you can be found liable when an employee is driving their personal vehicle for business or within the scope of his or her employment. Legally, employers are often found liable due to vicarious liability, negligence, or both.

Vicarious Liability

The general rule is that the actions of an employee (or contractor) are in essence the same as the actions of the governing agent or employer.  So, when an employer tells the employee to perform an action (drive), it’s as if the employer itself performed that action. This means any claims received while on the clock are for both the driver and employer.

Negligence

In addition to sharing liability, employers can also be charged with negligence. This could be negligent hiring, training, and or supervising of employees. When a company hires someone in a driving capacity, it’s their responsibility to make sure that he or she is a safe driver. This is true at new-hire, and also throughout employment. Failing to check or verify that drivers are doing their due diligence to be safe could be grounds for negligence.

The National Safety Council reported an example of both vicarious liability and negligence: “An employee was involved in a fatal crash while making ‘cold calls’ as he drove to a non-business-related event on a Saturday night. The firm did not own the phone or the vehicle, but the plaintiff claimed that the company was liable because it encouraged employees to use their ‘car phones’ and lacked a policy governing safe cell phone use. His firm settled the lawsuit for $500,000.”

How To Minimize Your Risk

Driving is the most dangerous work-related activity performed by employees. Minimize your risk to protect your company. Start by providing clear driver safety guidelines. Here are some best practices to reduce employee risk on the road:

  • Identify all employees driving personal vehicles on behalf of the business.
  • Perform periodic Motor Vehicle Records audits.
  • Sign up for an Employer Notification Program for real-time alerts on changes in driving records.
  • Maintain a consistent driver safety policy to be followed by your employees. Include a code of conduct, responsibilities, vehicle standards, and cell-phone usage guidelines.
  • Establish reporting requirements. Include what, when, and how traffic violations and convictions will be reported.
  • Maintain hired and non-owned auto liability policies

In summary, employees who drive on company time (in any vehicle) can become a liability. Companies can prevent negligence by implementing driver risk management solutions. Contact us to learn how we can help you.

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