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If Your Employees Are Driving on the Clock – You Are Liable


Do your employees use their vehicles while on the company time? If so, you are liable if during working hours they need to drive to different vendors, businesses, offices and/or residential and commercial buildings. That quick drive to the post office or to purchase lunch can become a accident and legal matter within minutes. One moment they’re picking up the new promotional materials or tools, and the next their insurance company is after you because you sent them there. Even though employers aren’t liable for employees to and from work commute, the eight hours in between can become a legal nightmare if you don’t take precautions.

Here are types of everyday tasks you can be called about if an employee gets into an accident while on the clock:

  • Driving for sales calls
  • Taking deposits to the bank
  • Picking up lunch for an office event
  • Delivering something to another company’s place of business
  • Running corporate errands

What is “Vicarious Liability?”

“Vicarious liability” is a law that claims the actions of an agent are the same as the actions of the principle governing the agent. The moment you, the employer, tasks the employee to perform an action, it’s considered, under law, as if the employer has performed the same action.

Employers May Be Held Liable

When your company hires employees that you manage, who are driving for the company, it is the employer’s responsibility to make sure those employees are safe drivers. Make sure your company has a process setup to evaluate employees and oversee their driving behaviors. If an employer isn’t making sure their employees are demonstrating the proper effort in preforming their tasks safely, the employer could be liable for negligence.

The National Safety Council recently reported an actual example of both vicarious liability and negligence: “An employee was involved in a fatal crash while making ‘cold calls’ as he drove to a non-business-related event on a Saturday night. The firm did not own the phone or the vehicle, but the plaintiff claimed that the company was liable because it encouraged employees to use their ‘car phones’ and lacked a policy governing safe cell phone use. His firm settled the lawsuit for $500,000.”

Create a Program to Reduce Liability

One of the easiest and most effective ways to protect your company is to purchase a non-owned auto insurance policy. 

  • Develop a system to identify employees that drive in their own vehicles on company business, so you are aware and can keep track
  • You’ll want to ask for proof of employees’ personal insurance coverage annually or every 6 months, depending on how they are billed
  • Running Motor Vehicle Records annually can keep you updated on any changes in their driving record
  • Pull out a pencil and think up driver eligibility guidelines – like the number and types of violations or accidents that would create a risk of negligence
  • Very Important! Maintain hired and non-owned auto liability and umbrella liability policies
  • Finally, educate your employees on the best defensive driving practices in seasonal weather and various traffic conditions

You cannot take this lightly. There are approximately 25 million licensed drivers in Canada and over 200 million licensed drivers in America. Plus, there many drivers in states like California and New York who drive with suspended licenses and/or no license at all. There were over 40,000 fatalities and over 5 million crashes in America alone last year. People are getting into accidents, and sadly, people are dying. We all want our employees to be safe, and we want you to be safe too. By following the above guidelines, you’ll be one step closer to maintaining the safest best practices both on and off the clock.