When you start a new business, there’s always a lot of pressure to handle. Obviously, you will have to delegate work to manage the operations effectively. You will probably have to let one or more employees use the company car to make sales calls, run errands, and do all other tasks related to day-to-day operations. While this makes life easy for a time-strapped entrepreneur, employees take it as a perk.
However, with benefits come responsibilities and both business owners and employees must realize the responsibility of having the company vehicle on the road. If there is a mishap, it can be a matter of dispute as the car is driven by the employee but owned by the business. So it is important that both of them should be aware of the implications of such mishaps. Let us explain to them in detail.
Responsibilities of the employee
Any driver has a duty of care towards others on the road and an accident caused by your negligence can bring legal trouble. When you operate a company-owned vehicle, there are certain facts that you should take care of. It is important to understand your company’s car policy thoroughly. For example, you may not be permitted to use the vehicle outside of business hours or purposes. While you may face the consequences of breaking the contract clause, the liability for the accident caused while using the car illegitimately will fall on you. Also, check the insurance status of the vehicle. Practice responsible for driving and follow the road rules when you are behind the wheel. Ensure that the vehicle is well maintained according to the schedule in the company’s policy.
Responsibilities of the employer
As an employer, you have a greater responsibility because the vehicle is like a workplace and it needs to follow all the workplace health and safety checks. If an accident happens when the employee is driving the car for business purposes, the liability will be yours. As a part of the employer’s responsibility, you need to have up-to-date insurance for all company cars along with clear policies for their use. All vehicles should be well maintained and drivers should be trained and licensed to ensure safety on the road. If there are multiple vehicles that are rotated between staff members, it is recommended to maintain a vehicle log for tracking who has each vehicle at a specific point in time.
Liability for work-related car accident
In a majority of cases, the employer is liable for the injuries and damages caused in an accident involving a business vehicle, even if an employee is driving it. If you are a victim, you can have seasoned car accident attorneys at your service to ensure that the company has to compensate you optimally. These cases involve ‘vicarious liability’ and can get a little complex, so it makes sense for the victim to collaborate with an expert. Apart from the victim, the employee driving the company vehicle can also make a workers’ compensation claim if injured in the mishap. Considering that business owners have to pay more often than not, it makes sense for startup owners to have adequate insurance cover for company vehicles for covering the risk.
Exceptions to vicarious liability
Even as the company has to compensate the accident victim in a majority of cases involving business vehicles, there are some exceptions to the vicarious liability rule. The employee may be held liable if the mishap occurred while they were running a personal errand, even during the work hours. Similarly, a business cannot be held liable if a criminal act led to the mishap. Additionally, accidents while commuting to work are not covered under vicarious liability. In these cases, the compensation will be covered by the insurance company of the employee rather than the employer. As a startup, it is worth knowing when you can seek relief under these exceptions because you wouldn’t want to bear the burden of compensation when you shouldn’t.
Letting employees use business vehicles is imperative for businesses because that’s the only way you can operate smoothly. But you need to make sure that they are careful about handling the vehicle because you wouldn’t want to end up in legal hassles because of their negligence. A proactive approach towards vehicle maintenance and driver training is important. At the same time, you need to be aware of the concept of vicarious liability so that you take responsibility only when it is really yours. Finally, proper insurance coverage for all your business vehicles is something you shouldn’t forget.