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When you decide to permit an employee to drive a company vehicle or even their own vehicle while on the clock, you're opening yourself up to liability for any damage or accidents the employee may cause.
In order to make proper decisions regarding company cars and employee driving, here are the four situations, via the legal principle of vicarious liability, that are most likely to result in employer responsibility for employee car accidents.
Vicarious Liability Due to Owner Liability Statutes
Some states impart strict liability for car accidents upon the car's owner, which means that an employee driving a company car, even outside the scope of employment, will result in employer liability.
Vicarious Liability Due to Negligent Maintenance
As an owner of a vehicle, it is the business' job to ensure proper maintenance, including complying with safety recalls. If improper care caused the car accident, the business may become liable.
Vicarious Liability Due to Negligent Entrustment
It's also the job of a car owner to exercise due care when a third party is entrusted with the vehicle. If you failed to look into an employee's driving record, or knew or had reason to know that he should not be driving, then you may be held liable if he crashes a company car.
Vicarious Liability Due to Respondeat Superior
The doctrine of respondeat superior imparts liability on an employer in the event that an employee acts negligently while acting within the scope of his employment. If an employee is in an accident--whether driving a company or personal vehicle--while engaging in work activity, you can be held liable.