How Car Accident Claims Work When a Business Owns the At-Fault Vehicle? 

  • If the at-fault driver in a car accident was operating a business vehicle, you may have a claim against the business as well as the driver depending on the circumstances. 
  • Under the legal theory of “vicarious liability,” an employer can be held liable when an employee’s negligence causes someone to be injured. In certain situations, the employee may also be liable. 
  • With small businesses or sole proprietorships, the business owner may be the only person who drives the vehicle, and you can file an insurance claim against the owner’s policy—whether that is a personal auto policy or a commercial vehicle policy.  
  • To be fully protected from car accident claims, business owners should purchase a commercial auto insurance policy if they or their employees use vehicles for business reasons. 

In the bustling Metro Atlanta area, business vehicles come in all shapes and sizes, from large semi trucks to small sedans operated by Uber drivers. When the drivers of these vehicles cause accidents, injured victims may have a legal claim against them, the company they work for, or both. Receiving compensation for your car accident injuries generally means filing a claim against the insurance company responsible, but the claims process can be more complicated when the accident involves a business vehicle.  

For example, a claim against a small business owner who uses their personal vehicle for work is handled differently than one involving a large corporation with a fleet of trucks and employees. Understanding the different ways that business vehicle claims work can help ensure that you receive maximum compensation for your injuries. 

How Does Insurance Coverage Work for Business Vehicles? 

In Georgia, all vehicles must have a certain amount of liability insurance coverage to operate on public roads. For regular auto insurance coverage, Georgia drivers must carry at least $25,000 per person and $50,000 per accident in bodily injury liability and at least $25,000 per accident in property damage.  

If the vehicle does not meet the criteria for a commercial vehicle under federal or state law, it is subject only to these minimum insurance standards—even if it is used for business purposes. However, if you operate a vehicle that is classified as commercial under federal or state law, you will need to carry an insurance policy with a much higher coverage limit than is required for a regular automobile. 

Under federal regulations, a liability insurance policy covering a commercial vehicle carrying freight must provide $750,000 to $5,000,000 in coverage depending on the type of commodities transported. Commercial vehicles designed to transport 16 or more passengers must carry $5,000,000 in coverage; those transporting 15 or fewer passengers must carry $1,500,000. Commercial vehicle policies must also provide at least $5,000 per vehicle and $10,000 per occurrence in cargo insurance. 

If the vehicle meets the commercial standard under Georgia law, you are required to carry liability insurance with at least $100,000 per person and $300,000 per accident. If your vehicle carries more than 12 passengers, the minimum requirements are $100,000 per person and $500,000 per accident. Georgia commercial vehicles are also required to carry at least $25,000 per vehicle and $50,000 per accident in cargo insurance coverage. 

It is important to note that even though the law may not require certain vehicles to meet these commercial coverage standards, insurance companies consider any vehicle a commercial vehicle if it is used for business purposes—which means that a personal auto policy would not fully cover the costs of an accident in many situations. 

To be fully protected, business owners should purchase a commercial auto insurance policy if they or their employees use vehicles for business reasons. Commercial auto insurance policies typically cover liability, physical damage, medical payments, uninsured/underinsured motorist coverage, and hired/non-owned auto coverage (i.e., coverage for rented vehicles or for when you or your employees are driving your own vehicles for business purposes). This type of policy is more expensive than regular auto insurance but provides far greater coverage. 

Businesses may have adopted a streamlined process for handling auto insurance claims, but the level of streamlining varies depending on the business’s size, industry, insurance provider, and claims management approach. Generally, large companies with dedicated risk management teams or self-insured fleets have more streamlined processes in place, while small businesses often rely on their insurance provider’s standard claims process, which can be slower and more cumbersome. 

Why Does It Matter if the Vehicle Is Owned by a Business? 

If you are injured in an accident caused by a business-owned vehicle, seeking compensation can be more complicated than in a regular car accident claim. In typical car accidents, you may have a claim for damages against the at-fault driver, which means that the at-fault driver’s personal auto insurance company is responsible for covering your costs (unless the driver is uninsured). 

If the at-fault driver was operating a business vehicle, however, you may have a claim against the business as well as the driver depending on the circumstances. In both claims, keep in mind that you are generally “going after” the insurance company, not the driver personally. 

With small businesses or sole proprietorships, the business owner is sometimes the only person who drives the vehicle. In that situation, there is no legal separation between the business and the driver, which means you can file an insurance claim against the owner’s policy—whether that is a personal auto policy or a commercial vehicle policy. If the policy limit is not enough to cover your damages, you may file a legal claim against the owner and recover from their personal and/or business assets. 

With other types of businesses, the company owns one or more vehicles, and its employees operate them as part of their job duties. These companies typically have insurance policies that cover all their business operations, including vehicles driven by employees. Under the legal theory of “vicarious liability,” an employer can be held liable when an employee’s negligence causes someone to be injured. In certain situations, the employee may also be liable. 

That means you may have a claim against both the business and the employee, and you can file against both insurance policies to recover compensation. With multiple insurance policies, there is usually more insurance available to cover the victim’s costs. Note that if a business is responsible and has insufficient coverage, the victim may try to collect compensation from the business directly (by putting a lien on its assets).  

While the basic steps to filing insurance claims follow a similar pattern, there can be some differences in filing a business vehicle accident claim versus a personal accident claim. For example, business policies often offer additional coverages like cargo insurance, hired and non-owned auto insurance, or workers’ compensation for employee injuries, and these might have separate reporting procedures.  

Some large trucking companies may handle insurance claims in-house, which means you would not have an outside claims adjuster involved. When businesses self-insure a fleet of vehicles, they may be more likely to offer a settlement to protect the company’s reputation. 

Why Small Businesses Will Declare a Business Vehicle 

Many small businesses are owned by people who work alone, or without employees, which means they only use one vehicle that belongs to them personally. Even though they may not be required by law to carry commercial vehicle insurance for their car, truck, or van, small business owners often opt for commercial coverage because of the advantages it provides. 

One of the most common reasons a small business owner will declare their vehicle a business vehicle is for added liability protection in case of an accident. Because insurance companies consider any vehicle used for work a business vehicle, you must purchase a commercial vehicle policy if you want the higher level of coverage it affords. If you choose to rely solely on your personal auto policy, you may find that the cost of a serious accident exceeds your coverage, which leaves you vulnerable to a large verdict and a lien on your personal and/or business assets. In some cases, a small business owner could lose everything. 

Even though commercial auto insurance premiums are more expensive than regular auto coverage, a self-employed contractor or small business owner can write off the insurance cost in their taxes. Given that the benefit typically outweighs the cost, many small business owners operating on Atlanta area roads carry commercial policies for their vehicles—while using these vehicles for both business and personal transportation. 

Why Does Business Use of a Vehicle Matter? 

For purposes of determining whether a company is liable for the actions of an employee, it matters if the vehicle is being used for business reasons. Generally, any time an employee is performing duties related to work, it is considered “on the job”—even if they are also doing personal business or driving a personal or rental car. 

The key to holding a company liable depends on whether the employee was acting within the scope of their employment, which depends on the facts of each case. If the driver was operating a company-owned vehicle at the time of the accident, there is a presumption that the employee was acting within the scope of employment. The company may overcome this presumption by showing that the employee was performing a personal errand that in no way involved their job or provided any benefit to the employer. 

For example, if an employee causes an accident on their lunch break while driving to a restaurant, it may be considered outside the scope of employment. However, if they were meeting a business associate for lunch or having a business-related conversation on their cell phone while driving to the restaurant, it may be within the scope because they were acting for the benefit of their employer. 

Sometimes a person may be performing work but is not considered a covered employee, such as when a company uses independent contractors. To determine whether the company that hired them can be held liable, the court looks at factors such as whether the contractor had their own insurance coverage, whether the vehicle was registered and licensed in the company’s name, and what type of control the company had over the contractor’s work and schedule.  

If the driver is considered legally independent, you may have a claim against their insurance policy but not against the business that hired them. If the driver is not legally independent or is an employee, you may have a claim against the business for the driver’s negligence. Holding an employer vicariously liable is especially important in cases involving serious or fatal injuries because the employer typically has additional insurance and/or more assets available to pay a high damage award.  

When Would You File a Claim Against the Business Directly? 

Vicarious liability is not the only way a business can be held responsible for car accidents caused by employees. The company may also be directly liable for causing the accident for other reasons, such as failure to properly maintain the vehicle (e.g., faulty brakes or tires), insecure cargo, or hiring and retaining drivers who are unqualified or unsafe (e.g., history of accidents or driving under the influence). If the company itself was negligent, it is responsible for the damages it caused even if the costs exceed the limit of its vehicle insurance policy.  

Consultations Are Free at The Millar Law Firm 

If you or a loved one has been injured in a car accident involving a business vehicle, you should speak to an experienced personal injury lawyer about your claim and compensation options. Our attorneys know how to determine who is responsible—the driver, the business, or both—and recover maximum compensation for your injuries. Call The Millar Law Firm at (770) 400-0000 or contact us online to set up a free consultation with one of our attorneys. 

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