Legal Issues That Come With The Use Of Company Vehicles

Most businesses require their employees to commute for work, and it makes sense to let them drive a company car to save on massive reimbursements. It is a practice that thousands of businesses across the U.S. follow. But things aren’t as simple as they appear when it comes to owning business vehicles and letting your employees use them. You can expect some serious legal implications if someone has an accident while driving a company car. It is vital to understand your liability and have a strategy in place to deal with such mishaps. Let us explain the legal issues and risks that you may encounter in this situation.

Photo by Snapwire from Pexels

Employer liability for employee’s negligence 

Litigation is perhaps the biggest concern for American business owners, and accidents with company vehicles are among the leading causes of corporate lawsuits. If an employee has an accident while driving a company car, the victim can hold the business responsible for the driver’s negligence. The attorney can use different legal options to present an argument in such cases. These include Respondeat Superior, negligent hiring or retention, negligent maintenance of a vehicle, and negligent lending of a vehicle. Respondeat Superior is the strongest assertion in personal injury lawsuits.

In addition, a holding company is a popular tool for entrepreneurs and individuals to store their assets. A holding company is a company which is created purely for the purpose of storing assets. This can be any type of asset from IP to real estate. Using a holding company, one can protect one’s assets from creditors and others who wish to expropriate an asset. For more information, consider visiting this resource which explains holding companies in detail.

Liability insurance can come to your rescue

In at-fault states like Tennessee, the person responsible for the mishap has to pay for the damages. The value of compensation is high if the accident is serious, which often happens when you have a crash with a pedestrian or motorcycle rider. The victim will hire a specialist Nashville attorney to help with motorcycle accident case to claim a massive amount, which can land your business in deep trouble. Fortunately, you can expect respite if you have insurance coverage for the vehicle. With adequate coverage, you will have enough to bear the cost of compensation and litigation. Every business must have insurance for the vehicles it operates for company use to stay on the safe side because accidents can happen at any time. 

Employers may not always be responsible

While accidents with business vehicles are always a reason to worry for employers, there are times when you may not be responsible. “On the job” is the key to determining the liability for the mishap. You will be liable only when the person behind the wheel is driving in the course of their work responsibilities. For example, commuting to or from work is not on-the-job driving, even if the employee is in a company car. Similarly, you cannot be held responsible when the driver had an accident while driving for personal errands or leisure. Whether the employee is driving on the job is often tricky to prove, but it is the best defense you can have to save yourself from a massive compensation.

Litigation is the last thing that any business owner will want to encounter, but the risk runs high if you have employees driving company vehicles. It is worth going the extra mile with driver training and vehicle safety. But you should still be ready with a legal defense plan because accidents can happen despite the best precautions.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Scroll to Top