Having access to a company car is often a wonderful thing. You get to drive some of the best new executive models, and put it all on the company card. You get the keys to a slick new BMW or Mercedes. The company pays for your petrol, maintenance, and insurance costs, while you drive comfortably. Of course, it’s rarely that simple! For all these benefits, there are some drawbacks. For instance, who foots the bill if there is an accident involving the company car? Are you, the driver, responsible? Or is the company liable for the entire bill?
There’s no worse feeling that damaging your company car. You scrape it against a bollard, reverse it into another car, or find yourself in a head-on collision. There’s the initial surprise and fear that comes with any car crash. But, then there’s the slow realisation of the repercussions. If you’ve damaged the company car, is it your responsibility to deal with the fallout? Are you liable for the expenses? It’s a confusing topic, and there is no right answer. Let’s take a look in more detail.
How were you using the car?
When you take a company car, there is a certain agreement made by employee and employer. The employer gives you access to use the car, and they understand that you’ll use it for both work and personal use. But, there is a distinction here. If you crash the car while on business, during company hours, they’ll typically pay the bill. If you were acting ‘within the scope of employment, the car is under the responsibility of the company. If, however, you damage or crash the car while on a personal errand, things get a little trickier. In that case, you may liable for the incident personally.
Who was at fault?
Of course, this question only arises if you, the employee are at fault. If you weren’t to blame for the accident, then your company will simple seek damages from the offender’s insurance company. This follows normal procedure following an incident. Remember, the insurance is in the company’s name. So, they will handle the claim, and make sure money is returned. Meanwhile, you can rent a free courtesy car from the likes of Acorn Rentals. If the accident wasn’t your fault, you won’t pay a penny. The offender’s insurance company will cover the costs of rental, as it was their fault. The trouble arises if the accident itself was your fault. If that’s the case, and you were using it for a personal errand, you are liable for the costs.
In the case of reckless behaviour
If you were found to have caused the incident due to reckless behaviour, there may be severe consequences. First of all, your company will ensure that you pay the damages from your personal expenses. Secondly, and more dangerously, they may fire or discipline you in any way they see fit. The reason for this is simple. If you’re in a company car, a van, or a truck, you are representing the business. If you’re speeding or driving dangerously, you are negatively affecting the company. You have also caused criminal damage to your company’s property, the car.
As you can see, this area of car insurance policy is difficult to navigate! If you need more information, ask the representative at your company.