Work errands and businesses often get their employees running the company car to get the job done. Sometimes at a misfortune, even company cars get into accidents. The complexity in this case is that, the driver is an employee and the owner of the car is the Company. The question then arises as to who is liable for the act.
What one needs to know is that at the event of an accident on the company car, the employee needs to determine specific facts of the case. These facts will help to identify if it is the employee driving the company car who will be responsible for making the payments to the third party? Or will it be the responsibility of the Company?
When is the Company responsible:
In the Company setup, the employers are always accountable for the actions of the employee if they are under duty. Therefore, in the case of paying for injury and property damages, it is also their responsibility of the Company.
For accidents caused by employees, the issue if Liability insurance comes into matter. Liability insurance pays for the damages caused to the third- party on behalf of the employer. There are two types- general liability policy and commercial vehicle policy. For vehicular accidents, the latter implies. A Commercial Vehicle Policy is like any other Auto Vehicular Policy. The only difference is that it has a coverage limit that is typically higher and with more stringent terms and conditions.
In the case of a car accident, it is usually the insurance company of the employer’s that protects the employee who was driving the company car. In cases where the employee gets charged against a lawsuit, the liability of payments gets covered by the insurance company under the Commercial Vehicle Policy.
For Federal employees driving government vehicles and who gets involved in a car accident are covered under the Federal Tort Claims Act.