When a car accident involves a company vehicle, determining responsibility is usually more complicated than it seems. One reason for this is that involving company vehicles tend to raise questions that are beyond standard car crashes. Liability can go beyond the driver to the employer or the business. Michigan operates under a no-fault insurance policy which brings upon an extra layer of complexity.
Michigan’s No-Fault Law and Company Vehicles
Michigan uses a no-fault insurance system, which means that people attempt to receive fair compensation after most car accidents through personal injury protection (PIP) instead of through lawsuits. If a company vehicle is involved, finding out which PIP policy covers you becomes more complex because of Michigan’s priority rules.
In a lot of cases, an injured employee driving a company vehicle will tend to look at the employer’s commercial auto insurance policy for PIP benefits. However, based on the circumstances, coverage may have to come from the injured person’s own auto insurer or a household member’s policy. Being sure to understand these different rules and how they apply is essential since choosing the wrong insurer can delay receiving benefits and create unnecessary disputes.
Employer Liability and the “Scope of Employment” Rule
Under Michigan law, an employer can be held legally responsible for an accident that involves a company vehicle if the employee was acting within the scope of employment during the crash. Typically, if an employee was performing job-related duties like making deliveries or traveling between job sites, then the employer could be liable for damages that are caused by the employee in the vehicle.
Courts look closely at whether or not the employee’s actions were supposed to help benefit the employer and if the employer had any control over the employee’s actions during the accident. If those factors are present, then liability can go passed just the driver and extend onto the business itself.
When an Employer May Not Be Liable
There are situations where an employer might not be held responsible for a company vehicle accident. If the employee was using the vehicle for personal reasons, like running errands that weren’t related to work then the employer can be protected from liability. Any unauthorized use of a vehicle can also limit or completely eliminate employer responsibility.
In addition, employer policies and vehicle use agreements can play a significant role. If there are clear violations of these agreements that are at the hands of the employee, courts can determine that the employee was behaving outside the scope of employment and therefore not hold the employer responsible. Since these decisions are very fact-based, careful review of the accident is the general protocol.
Company Vehicle Insurance Coverage Issues
Insurance coverage in company vehicle accidents can be more complicated than average car crashes. Commercial auto insurance policies can hold different limits than personal ones. Questions that are brought up usually revolve around who is qualified as an insured driver, what the purpose of the vehicle being used was, and which policy takes priority when multiple insurers are involved.
Disputes can also happen between insurers that are attempting to shift responsibility for paying benefits or defending claims. These can delay compensation for the injured parties involved and create fairly significant legal challenges for both the employees and the employers.
Why Legal Guidance is Important in Company Vehicle Accidents
Accidents involving company vehicles are not straightforward. There are many layers that play a role in how these cases are handled which make them much more complex than your standard car accident. Determining whether an employer is liable, finding the correct insurer, and understanding how Michigan’s no-fault rules apply all requires precise legal analysis. Small mistakes can lead to benefits being denied or missing compensation.
Having an experienced legal team can help injured individuals know their rights while also helping businesses manage their risk of liability. Duff Law in Grand Rapids is here to do just that. Make sure you reach out for your free consultation as soon as possible.