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How Does Company Car Insurance Work?

August 19, 2019

Every day, millions of drivers hit the road for their jobs. Truck drivers, delivery people, federal agents, police officers, bus drivers and many others must drive to fulfill the duties of their careers. An accident with an on-the-job driver or company car could involve more than just driver liability; the company the driver was working for at the time of the accident could also be vicariously responsible. In these cases, the company’s car insurance plan may reimburse the driver and/or victims for their damages.

Employee driving company car

Company Cars and Insurance Claims

Employees often drive company cars, both on the job and after they have clocked out. Construction workers, HVAC industry employees, law enforcement officers and businesspeople routinely operate company-owned vehicles. If a business lends employees company cars, it should purchase enough automobile insurance to fully cover the vehicles and drivers while on the job. The minimum amounts of insurance in Colorado are $25,000 in bodily injury liability per person, $50,000 per accident and $15,000 in property damage liability.

Standard Insurance vs. Commercial Policies

The company should either purchase commercial auto insurance coverage or at least hired/non-owned insurance to cover on-duty drivers and company cars. Commercial policies generally offer more coverage than standard insurance, but it is more expensive to purchase. Commercial insurance plans typically will not cover damages if the driver was off-duty at the time of the collision. If the driver was operating the vehicle outside of work, for personal purposes, the company’s insurance plan may not cover any damages. While driving a company car for nonbusiness purposes, the individual driver could be responsible for damages instead.

Personal Insurance Policies

Many individual auto insurance policies specifically do not cover accidents while the driver was using the vehicle for business reasons. Most drivers assume their personal insurance policies will cover accidents when in reality they will not unless the driver buys extended non-owned automobile coverage. Luckily, company car insurance will cover damages in most cases. Learning which policy might cover medical bills, property repairs and lost wages after an accident involving a company car could take help from a car accident attorney in Denver.

Employer Vicarious Liability for Car Accidents

In most company car accidents, the company’s automobile insurance will cover the damages. However, if the insurance plan does not cover the specific accident, the at-fault driver may have to pay. The employee could be individually responsible for paying victims’ damages if he or she caused the car accident and was not performing work-related tasks at the time of the crash. The employee may also have to repay the company for destruction to the company car. If the driver was on the clock at the time of the collision, the company could be vicariously liable for the negligence or recklessness of the driver instead.

Filing a Personal Injury Claim for Employee Negligence in an Accident

In a crash involving employee negligence, victims may be able to file personal injury lawsuits against the company outside of the insurance system. Colorado’s at-fault insurance laws enable crash survivors to bring lawsuits against at-fault drivers, companies and other parties after serious car accidents. Employers are almost always vicariously liable for the negligence of their on-duty drivers in Colorado, as long as the driver was operating the vehicle for business purposes at the time of the collision.

Bringing a lawsuit against a company rather than an individual driver could have better odds of securing adequate compensation. A company will generally have superior coverage for damages. An injury lawsuit could also result in payment for punitive damages and pain and suffering. If the driver was off-duty at the time of the crash, however, a victim’s only outlet for recovery may be the driver’s insurance plan.

Identifying fault and liability for a crash involving a company car or on-duty driver may take assistance from an injury attorney. A careful investigation of the case could help prove the driver, company or someone else’s fault and liability for the car accident. A car accident lawyer could assist victims with serious or catastrophic injury cases involving company cars in Denver.