Who Pays if You’re in an Accident in a Company Car?

Car accidents can become even more complicated when the driver was driving a company vehicle. Who is liable? The driver? The company? Whose insurance company must step up to pay the claim for the damage that was caused? The answer in Utah is actually quite simple. The employer will almost always be vicariously liable for the actions of the employee if the accident was sufficiently work related. Vicarious liability is when one party is legally responsible for the actions of another. This could come about through a couple of different theories.

The first theory to understand is one called respondeat superior. This legal term applies a principle-agent relationship to an employer-employee situation. It means that when the employee does something, under the law, it is as though the principle did it. The test for whether respondeat superior may be applied is whether or not the employee was acting in the course and scope of his employment at the time of his actions. For example, if an employer asked an employee to go make a delivery for the company, using a company truck, during normal work hours, while being paid, and it was something that the employee routinely did, the employee was clearly acting within the course and scope of his employment on his way to and from the delivery. To illustrate the opposite situation, suppose that an employee is in fact sometimes asked to make deliveries for work, but one day, after he gets off work, on his way to visit his girlfriend, in his own car, he decides to grab a burger and hits someone in the burger joint parking lot. That situation is clearly not within the course and scope of his employment. Even situations like deciding to grab a burger while on route to make a work-related delivery can be considered a “frolic” in the eyes of the law and may be deemed to be outside the course and scope of employment. The specific facts of a case can certainly highlight a grey area of this law, but that is how vicarious liability would generally work in situations where employees cause car accidents.

When a company provides a high-level employee with an all-expense-paid company car, the analysis can be quite different. If the company actually owns the car, and it is registered in their name, although the employee will be listed as a driver on the insurance policy, the policy will be written in the company’s name. That makes this whole situation a no-brainer. After all, the owner of the car and the holder of the car’s auto insurance policy is always on the hook for the accidents of drivers who the owner permitted to drive the car. That is good news for victims of a car crash. They do not want to have to concern themselves with who will pay to get them better and how they can go about collecting the money. A good personal injury lawyer can answer all of the questions for you and can make the process a whole lot easier. It is important to remember that sometimes multiple insurance policies are involved in properly settling a liability claim after an auto accident.

This article is offered only for general information and educational purposes. It is not offered as and does not constitute legal advice or legal opinion. You should not act or rely on any information contained in this article without first seeking the advice of an attorney.