Liability for Employees' Vehicle Use

Suppose that you were the president of a security company employing armed guards. Would you establish policies on acceptable use of firearms and set limits on who was qualified to carry them? If asked this question, most business owners would probably say "yes." Cautious owners would, perhaps, even require their gun-toting employees to spend a minimum number of hours in training each year or establish other safety measures to reduce the likelihood of an unfortunate accident.

It's a bit puzzling, but if you asked those same business owners whether they have policies governing the use of company vehicles, if they sponsor driver training programs for employees, or if they have even given much thought to the consequences of letting an inexperienced driver get behind the wheel, many would answer "no." Yet it doesn't take much imagination to see how a 5,000 pound vehicle, traveling 65 miles an hour, will do more damage to a carload of people than a .38 pistol.

If you're concerned that you have not given this subject enough thought, there's hope! There are many things that you can do to lower the risks associated with having employees drive your vehicles. To help you, we have prepared discussions of some common ways that you or your company may be held liable for an accident. Along with each discussion, you'll find tips on reducing your risks.

If one of your employees is involved in an accident while driving a company vehicle and a victim of the accident sues, the victim's attorney will most likely make one or more of the following arguments for holding you liable:

  • Respondeat superior this is a Latin term that might as well be translated "Your employee was doing work for you at the time he/she contributed to the accident, so the accident is your problem." As you may be able to guess from this translation, one of the best defenses to such an argument is to show your employee was not acting within the scope of his or her employment at the time of the accident. A well-written policy on acceptable business use of your vehicles may help you here.
  • Negligent hiring or retention the theory underlying this argument is that you are liable for the accident because of the sloppy job you have done as an employer in hiring, or not firing, the person involved in the accident. And, the theory continues, if you had not hired (or retained) this person, there would never have been an accident. Defenses to this type of argument usually involve showing either that there was nothing wrong with your employee, or, if there was, that you had no way of knowing about it.
  • Negligent lending of a vehicle this argument is similar to negligent hiring or retention, but with a twist. In this case you are liable specifically because you let an employee use a company vehicle when you knew (or should have known) the employee was unfit to drive. Thus, a troublesome employee who is a good driver leaves you vulnerable to a negligent hiring or retention claim. Letting a model employee, who's sole weakness is that he or she is unfit to drive, use your vehicle sets the stage for a negligent lending claim. To reduce the likelihood of successful negligent lending suits against you, you will want to explore driver screening and implement a vehicle policy that alerts you when an employee is not fit to drive.
  • Negligent maintenance of a vehicle in negligent maintenance cases, you will be liable if the condition of your company vehicle made it unsafe to drive and that condition (for example faulty brakes or a bad tire) contributed to an accident. Obviously, the quality of your vehicle, rather than your employee, is the focus of this argument. Thus, taking steps to insure that your vehicles are adequately maintained and documenting that you have taken those steps is usually your best defense.
  • Our chart summary of vehicle liabilities sums up the elements of each of these grounds for a lawsuit and suggests ways to limit your risks in each case.

There may be additional arguments used against you in certain cases, which will vary depending on applicable state law. Moreover, different states may use different names to refer to these four arguments. However, nearly every argument used against you will bear some relation to one of the arguments described above.