Guidelines for Driving a Company-Owned Car

Although circumstances may vary, you do not necessarily need to be on the clock when using a company vehicle. For example, suppose your employer issues you a company vehicle to take home every day. In this case, the Employee Commuting Flexibility Act (ECFA) allows you to drive the company vehicle on your commute without being compensated for the drive.

Whether or not you can use the company car for personal errands depends on your company’s policy. Sometimes, employers allow employees to drive the company car for personal use. However, in doing so, they may open themselves up to liability if the driver causes an accident. The employer can also face damage to their reputation if the employee drives recklessly or irresponsibly. There are also additional insurance considerations.

Suppose the company does allow employees to use the vehicles for personal use. In that case, they must consult their insurance provider to ensure coverage in an accident. If the employee is covered, the insurance company may charge additional fees. Because of the increased risk and insurance requirements, employees should check with their employer before using their company car for personal use.

If an employee drives their personal car for business purposes, the business can still be liable after an accident. If the employee was at fault in the accident, their insurance will typically pay first. However, the employer’s insurance may still need to pay an additional settlement.

Determining who is at fault for an accident in a company vehicle is one of the first steps of the post-accident process. There are several situations in which the employee may be at fault for the accident:

• The employee was engaged in inattentive or faulty driving
• The employee has committed a crime while driving the vehicle (including driving under the influence or driving recklessly)
• The employee is using a company vehicle for purposes other than work (including personal errands during regular business hours)
• The employee is using the vehicle outside of business hours, and an accident occurs during that time

Employers are financially and legally responsible for injuries and property damages caused by an employee while driving a company vehicle. In many company vehicle accidents, the company or employer’s liability coverage relieves the employee from having to pay for damages personally. If the employer purchased commercial auto insurance, the provider would typically pay any claims related to an accident.

The at-fault driver (and their insurance company) is usually responsible for damages after an accident. If someone driving a company car is involved in an accident caused by someone else, the at-fault party’s insurance typically pays for damages.

It’s important to understand that the driver has the same rights in a company vehicle accident as in any automobile accident. Liability insurance and Workers’ Compensation are two types of insurance coverage that will be notable when seeking compensation for an accident with a company vehicle.

Workers’ Compensation is coverage that compensates employees for medical bills, a portion of lost wages, and some out-of-pocket expenses. If the employee is disabled due to the accident, they will likely receive a settlement.

Liability insurance reimburses employees for injuries sustained in the accident, usually when caused by the other driver. They may cover medical bills, out-of-pocket expenses, lost wages, and pain and suffering.