What Happens When an Employee Gets into an Accident with the Company Vehicle?
Of course, you have commercial auto insurance, but how does your employee recover lost wages and medical expenses if they were injured in the accident?
It depends upon what the employee was doing at the time of the accident and whether you are located in a no-fault state or an at-fault state. Read on for the possible scenarios, from the office of a noted Norristown car accident attorney.
The No-Fault States vs the At-Fault States
Most states fall into one of these two categories, although Kentucky, New Jersey, and Pennsylvania give drivers a choice between the two types of insurance. The primary differences between no-fault and at-fault systems are whether the victim has the right to sue and who pays for the victim’s damages.
Whether your insurance will pay the victims, or the victims have the right to sue you and your employee, depends upon where your business is located and what type of auto insurance you have.
The purposes of no-fault insurance are to reduce the cost of auto insurance by removing small claims from traffic accidents from the court system and to eliminate the need for the victim to show or prove that the other driver was at fault. In no-fault states, if two cars collide, each driver’s insurance pays for minor injuries regardless of who was at fault for the accident.
In most no-fault states, a car accident victim is still able to sue the other driver for non-economic damages, such as pain and suffering, or if the victim’s damages meet or exceed a monetary threshold established by state law.
The no-fault states include Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.
All other states have adopted the at-fault system of auto insurance. This type of insurance system is based on tort liability, so each insurance company pays for the damages sustained according to the degree of fault, respectively.
The driver who caused the accident will be responsible for the damages to other parties involved. The driver’s insurance company indemnifies the driver by paying up to the policy limits on the insurance policy to the victims.
If a car accident victim feels the amount of insurance payout is insufficient, he or she can file a lawsuit and seek uncompensated economic damages, such as medical expenses and lost wages, and non-economic damages, such as pain, suffering, and anxiety.
Add-On Insurance Coverage
Arkansas, Delaware, and Maryland are at-fault states that allow an insured individual to purchase additional insurance to provide for the same type of personal injury protection that would be available in no-fault states.
If a driver has this additional coverage, their insurance will pay the injured parties without determining who was or was not at fault. However, the injured parties can still sue or be sued for injuries and pain and suffering.
Will workers’ compensation cover an employee that was in a car accident with the company vehicle? Sometimes!
When Workers’ Compensation Covers the Employee
When Driving is in the Course of Regular Duties
If driving the company vehicle is part of the employee’s usual work, then both your auto insurance and workers’ compensation insurance will cover the accident. Your employee will be compensated for medical expenses and lost wages, and your auto insurance should cover damage to the company vehicle if you are in a no-fault state.
When Driving at the Direction of the Employer
If your employee was driving the company vehicle at your request or direction and was in an accident, the employee will be covered by workers’ compensation. In fact, if the employee was driving his or her personal vehicle at your request and got into an accident, he or she may still be covered by workers’ compensation.
When Workers’ Compensation Does Not Cover the Employee
There are limitations to workers’ compensation coverage:
If you loaned the company vehicle to an independent contractor, a client or customer, or a vendor, and they get into an auto accident, they are not eligible for workers’ compensation benefits. Your commercial auto coverage will kick in, and how that unfolds will depend upon whether you live in a no-fault or at-fault state.
If your employee ran an errand, stopped for lunch, stopped home, visited a friend, or took any other sort of detour from work duties that you did not know about and did not condone, that employee is not eligible for workers; compensation benefits.,
Committing a Crime
If the driver was doing something illegal, such as speeding, running a red light, or driving the wrong way down a one-way street, and was in a car accident, workers’ compensation benefits will most likely be denied.
Impaired Due to Drugs or Alcohol
Driving while impaired is considered grossly negligent conduct that may render the employee-driver ineligible for workers’ compensation benefits.
About the Author
Veronica Baxter is a blogger and legal assistant living and working in the great city of Philadelphia, she frequently works with Craig Altman, Esq., a car accident lawyer in Media, PA.