Protecting your small business from Auto Accident claims

As a small business owner, you want to do everything you can to minimize the risk of an auto accident claim against your company. Auto accident claims can cost considerable man hours and many thousands of dollars to resolve even if you win, so it’s best to consider what types of claims can be made against your firm and take steps to reduce those risks.

What types of claims can be made against your company?

Let’s consider what types of claims can be made against a company arising out of an auto accident. These divide up into two groups, depending on who is allegedly at fault for causing the accident.
In the first group are claims that your employee has an accident while he is in the course and scope of his employment, and that your company, as his employer, is indirectly liable for his negligence in causing an accident. This legal doctrine is called "respondeat superior." In this situation, the allegedly negligent party is your employee, but you’re responsible for the injury or damage done, because it happened in the prosecution of your business.
In the second group are claims directly against the employer alleging that the employer was directly responsible in some way that contributed to the accident. These claims fall into two broad types. The first relates to claims that the company vehicle was not properly equipped or maintained, and that the accident happened as a result. The second involves claims that the employer selected a habitually negligent or incompetent driver, or retained such an employee after notice of a problem with the employee.

Preventing claims against your business

Preventing claims arising out of maintenance and equipment issues is fairly straight forward. It simply requires that the company vehicles be regularly and appropriately maintained.
Preventing claims arising out of negligent selection or retention situations are a little harder, but also involve forethought about who can be trusted with the keys to the company truck. The same is true about preventing vicarious liability claims.

Company policies

Your company policies in this area should be carefully designed to help prevent problems from arising in the first place.
If your employees are going to be driving company vehicles, then company policy should require that any safety issue with a company vehicle be brought to the attention of a manager immediately.
Your company policies should require a regular background check into every driver’s "motor vehicle record," that is updated at least every couple of years. In addition, company policy should require that all traffic citations issued against an employee while on company business are brought to the attention of the employee’s manager. The same is true of all physical damage to any company vehicle.
Then your company must be sure to follow those policies – failure to do so will result in additional liability.
Naturally, every auto accident involving a company employee, that occurs on company business, whether it involves a company vehicle or not, should be reported to the employee’s manager.
Finally, your firm should prohibit use of any cell phone in a moving vehicle on company business. Although there is research suggesting that cell phones may be no more distracting than all the other things folks do in their cars, such as eating, changing the radio station, or swapping CDs, as a general rule, minimizing distractions behind the wheel is a laudable goal, and may well end up saving you time and money.

Insurance

Finally, you should be reviewing your auto insurance policy at least yearly with your insurance agent to make sure that the type of coverages on your policy are appropriate to your business and that the amount of coverage is sufficient to protect the assets of the firm.
The Bowman Law Office, LLC can assist your company in writing company policies that will help prevent auto accidents and claims against your company. Please contact us for further information.