How Far Does Employer Liability for Employee Accidents Extend?

Employees often use their personal vehicles to perform work tasks. But how far does employer liability extend if the employee has an accident?  

Last month, the Arizona Supreme Court held that an employer was not liable for an accident that occurred while an employee was returning to his hotel room after dinner during a business trip. Engler v. Gulf Interstate Engineering, Inc. (Ariz. 2012). Last year, however, a California court held an employer liable for an intoxicated off-duty teacher’s accident while driving to a conference the day prior. Smallwood v. Huber (Cal. Sup. Ct. 2011). In the first case, the court denied liability because the employee was engaged solely in personal activities at the time of the accident. In the second case, the court held the employer liable because it gave the employee a paid day off to drive to the conference.

The potential for liability is only magnified where the employee has the accident while performing a work task or in a company vehicle. As it appears that these will be very fact-driven analyses, employers may wish to conduct a precautionary review of the vehicle use sections of their employee handbooks. Ensure that they prohibit “distracted” driving, including texting and use of mobile devices, while engaged in business-related matters. Driving for work after consuming alcohol, drugs, or other substance that might impair driving should also be prohibited. And, employers should ensure that employees have appropriate personal automobile insurance and remind them that this insurance is primary in an accident.