Are Companies Liable for Car Accidents Caused by their Employees?

In Seattle, we routinely see commercial drivers and vehicles engaged in a wide variety of activities throughout a normal day.  Some drivers are busy delivering our purchases from Amazon and a wide variety of other online sellers.  Others commercial vehicles are driven by those providing services, such as plumbers, electricians, and lawn care workers.  Yet other vehicles are driven by executives on their way to cross-town meetings.

Like other drivers, these drivers are all responsible for causing their fair share of crashes.  If you or a family member has been hit by one of these drivers, you likely will want to know about your right to sue the business employing the negligent driver, in addition to your right to bring a lawsuit against the negligent driver.

As experienced Seattle car accident lawyers, one of our first tasks in a car crash case is to determine all of those who bear legal liability so that an action can be initiated for full and fair compensation. Then, we can proceed against those who we believe are legally responsible.

Suing the Employers of Drivers Causing Accidents

In order to be able to sue the employer of the at-fault driver, a determination must be made as to whether the driver was in fact engaged as an employee at the time of the crash.  In some situations, the answer will be clear.  If the driver was delivering a package as part of their job, or driving to a customer to perform services at their home, then the driver will almost always be found to be acting in the course of their employment when the accident occurred.

Other evidence, however, may be conflicting.  If the driver was driving a company commercial vehicle – such as a company van with the company’s name on the side – this would also support that the driver was engaged in the course of employment.  Conversely, if the driver was wearing a UPS uniform, but was in their personal vehicle driving to the UPS facility, then the company may not be liable, as the driver had not yet “clocked in” and started their shift.

What About Business People Causing Crashes During the Work Day – Will Their Company Be Liable?

Suppose the crash was caused by a businesswoman driving to the other side of Seattle during the workday to attend a business meeting – can her employer be held liable?  What if she was driving while on a business trip?  These types of situations are highly fact-specific, so it is not always easy to provide a legal conclusion regarding liability without understanding the full facts and circumstances involved.

The Legal Theory for Holding Companies Liable for the Actions of their Employees

Under the law, there is a doctrine known as Respondeat Superior.  Respondeat Superior is a Latin term for “let the master answer.”  This doctrine means that a company will normally be liable for the acts of its employees so long as the act or negligence by the employee occurred within the course of the person’s employment.  Thus if a delivery driver causes an accident while making a delivery for their company, the company normally will be liable for a crash caused by their driver.

Understanding the Critical Role of Insurance When a Company May Be at Fault

In car crashes, there may be two types of insurance that are implicated – the insurance for the driver, and the insurance for the company.  In most cases, a lawsuit would typically be brought against both the driver and the company as co-defendants, and then the insurance companies for the driver and the company would work it out amongst themselves as to how the defense and damages would be paid.

As part of their insurance programs, most medium and larger-sized companies will maintain significant insurance to cover the potential liability caused by employees for all kinds of acts, including crashes caused by employees while driving.  This insurance usually extends not only to employees who drive significantly for the company (such as those driving delivery vehicles or who drive to perform on-site services for customers), but also to those who drive infrequently drive as part of the their job (such as office staff).

When a Company is Involved, the Potential Compensation Available Through Insurance May Be Much Greater

When a person is hit by a driver who was not driving for a company at the time of the crash, the injury victim (or their family) will sue the driver causing the crash, and the potential compensation available will usually be limited by the amount of insurance coverage maintained by the at-fault driver.  Unfortunately, many drivers are underinsured.  Because these drivers also tend to have no meaningful assets from which to collect a judgment, the victim (or the victim’s family) may be unable to recover from the at-fault driver.

Similarly, a huge number of drivers are also underinsured in the event of a crash that results in significant damages and injuries, even though such minimum coverages are increased periodically by the legislature.  As a result, crashes caused by drivers with minimum coverage also tend to result in inadequate amounts of compensation available.

Conversely, the amount of insurance coverage carried by companies is frequently significant, and typically far exceeds the amount of insurance carried by individuals.  Often companies will have comprehensive insurance programs that provide not only initial levels for certain types of damages, but also excess layers of insurance (often referred to as “umbrella” layers) that will provide additional compensation if the underlying layer of insurance is completely used.  As a result of these “deep pockets”, individuals hurt by company employees while working for a company may be more likely to obtain full compensation in cases of significant injury and damages than those injured by drivers causing injury when they are not working.

Mandatory Insurance Coverage for Commercial Vehicle and Trucking Crashes

Commercial vehicle delivery companies – such as those that routinely pickup and deliver packages from Amazon within a city – may be required to carry minimum levels of insurance consistent with their operations at depending upon the location and scope of their business operations.  Further, these companies typically will want to protect their business interest by purchasing coverage beyond any mandated minimum amounts; often such coverage will consist of multiple layers of coverage which may extend into the millions of dollars.

Additionally, companies engaged in Interstate trucking are required under Federal law to carry certain insurance coverages depending upon the nature of their operations and the type of loads they carry.  Also, because of their large size and weight, these commercial truck and trailer crashes are often much more devastating than crashes involving passenger vehicles.  As a result, tucking companies will usually be required to have insurance coverage of at least $750,000 for an accident, which far exceeds the amounts required by states for non-commercial drivers.  And, if they are transporting hazardous cargo, their minimum insurance requirements will usually be far higher.  These mandated insurance coverages are also important for those injured, and the families of those killed, as they help to provide full and fair compensation in the event of a crash.

Seeking Full Compensation in Crashes

In addition to proving liability and the damages suffered by our clients, we are highly experienced in seeking potential insurance coverage maintained by those responsible for crashes, including the insurance coverage maintained both by drivers and by the companies who employ them.  To learn more about how we can help you, we invite you to call us for a free consultation if you have been injured.

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