THURSDAY, OCTOBER 29, 2020
Hiring employees who operate vehicles for your business comes with its own set of unique risks. Accidents on the road occur frequently, and this is especially true for those who travel a lot, such as delivery drivers or drivers operating vehicles with a wide turning radius. When an employee causes an accident in one of your company’s commercial vehicles, the responsibility for that accident could fall back on your business.
Who Pays for the Damages in a Commercial Auto Accident?
How damages are paid in an accident depends on the state and the type of accident. Some states are fault states, which means that the driver who caused the accident will be held responsible for the majority (if not all) of the damages and injuries incurred.
However, compensation is dealt differently when the driver is operating a commercial vehicle. Since the driver doesn’t own the vehicle, they will not have a policy for it. Instead, commercial vehicles will be insured through the business, meaning the business will have to file a claim for an accident involving one of their commercial vehicles. This also means that possible lawsuits over damages and injuries can also be filed against the business directly rather than the driver.
This is why it is important to compete extensive background checks for potential drivers.
Exclusions to Commercial Auto Insurance
There are exceptions, of course. Drivers can still be sued directly for damages and injuries they cause while operating the commercial vehicle. As long as they have permission to operate the vehicle or are listed on the commercial auto insurance policy, they should be covered for potential legal expenses. Exclusions apply to this coverage such as if the driver causes an accident while under the influence of drugs or alcohol, or in the course of committing an illegal act.
If an employee is not given permission to operate the vehicle—such as if a disgruntled employee takes a company car and refuses to return it—the damages they cause should be covered as long as your business’ commercial auto insurance policy includes liability and comprehensive coverage. Comprehensive coverage may cover physical damage to the vehicle as well as theft or vandalism.
Are Driving Records Affected by Commercial Auto Accidents?
Since the driver is still operating under their license, the employee’s driving record can still reflect an accident in a commercial vehicle. These accidents can also have an affect on your commercial auto insurance rates.
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