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Guidelines for Driving a Company-Owned Car

Updated April 1, 2024 | By Emily Chimenti

Using a company vehicle can be a significant perk for employees. However, this privilege can turn into a potential burden. Driving a company vehicle allows employees to forego using their personal vehicles, saving money each year. However, it can pose several risks. Employees and employers should both be aware of the responsibilities pertaining to the use of a company vehicle.

What Are My Responsibilities as an Employee?

If you are an employee utilizing a company vehicle, it is essential to remember what you are liable for. As an employee, your responsibilities include the following:

  • You must ensure you’re legally allowed to drive a company car.
  • Understand the insurance policy for accidents.
  • Always follow road laws and regulations.
  • Keep the vehicle clean and follow the company’s maintenance schedule.

What Are the Employer’s Responsibilities?

As an employer, you also have responsibilities regarding company-owned vehicles. Your company vehicle should follow all workplace health and safety guidelines to protect your employees. Your responsibilities should include the following:

  • Ensure all company vehicles have current insurance and registration.
  • Track driver records and ensure all have valid licenses.
  • Create and enforce written policies for vehicle use.
  • Maintain and service all vehicles regularly.
  • Inform employees about all vehicle policies and procedures.

Frequently Asked Questions About Company Vehicles

Am I on the Clock While Driving a Company Vehicle?

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.

Can I Use the Company Car for Personal Errands?

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.

Is it a Business Risk for Employees to Drive Their Own Cars for Work?

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.

Frequently Asked Questions About Company-Owned Vehicle Accidents

What Happens When an Employee Is at Fault in an Accident With a Company Vehicle?

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

What Are the Employer’s Responsibilities When an Accident Involves a Company Vehicle?

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.

What Happens When the Other Driver Is Responsible for an Accident in a Company Vehicle?

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.

Can an Employee Expect to Receive Additional Compensation After an Accident?

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.

Accidents Involving Company-Owned Vehicles

When driving any vehicle, there is always the possibility that an accident may occur. However, getting into an accident in a company-owned vehicle can pose different complications than an accident within your own personal vehicle. Understanding who is liable for what can be confusing. The first step is determining who was ultimately responsible for the crash.

If you are an employee seeking additional or alternative compensation, contact the lawyers at WKW today for a case evaluation to determine your options.

Contact Wilson Kehoe Winingham Today

You may need legal assistance if you have been in a car accident in your company vehicle. Our experienced attorneys at Wilson Kehoe Winingham are ready to provide the guidance you need. Contact us today for more information or a free, no-obligation case evaluation.

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Let WKW put our experience to work for you. Contact us for your free case evaluation.


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