Skip to content

Vicarious Liability and What Happens When a Work Vehicle is Involved in a Motor Vehicle Accident

Vicarious Liability

Some tricky issues can arise if you are involved in an accident while driving a car for work.

In most cases your employer will have ‘vicarious liability’ for any costs arising from the accident, meaning the company is responsible for the accident and its insurance policy will cover damage and injury caused by you in a work vehicle, or while driving your own vehicle but using it for work.

Sometimes however an employer is not responsible if you cause a motor vehicle accident in a work vehicle. Your employer’s liability may depend on the circumstances, such as how and when the work vehicle was being used, and the terms of the contract between you and your employer in relation to the use of the vehicle.

This post provides more detail on what happens when you are involved in a road accident while driving a work vehicle. Seeking advice from legal professionals with expertise in this area of compensation law is advisable.

How vicarious liability works

Usually, your employer will be liable for the damage that you cause in an accident if you are driving a car in a work capacity. Even if you are an independent contractor, the owner of the car may be liable for the damage caused, but that liability will depend upon the terms of the contract between you and the company that you contract with, and whether the vehicle was being used for a purpose related to that contract. If there is no agreement between the contractor and employer, the contractor will usually be responsible for the damage.

There are some situations where an employer cannot be held vicariously liable for an employee’s accident while driving a car for a work purpose, for example, where:

  • you were committing a criminal offence when the accident occurred (eg – you were driving under the influence of drugs or alcohol, or driving recklessly);
  • you were not abiding by the terms of the contract that you entered into with the employer about the use of the vehicle.

What you need to know about using a vehicle for work

It’s important that when you need to use a car as part of your job you understand the implications of doing so from the outset.

If you are provided with a car by your workplace, your employer should make sure that the vehicle is comprehensively insured. The insurer should be aware that you will be driving the vehicle and the vehicle’s insurance details should be provided to you.

The policy should also cover what happens should the car break down or become involved in some other unforeseen event. The car must also be maintained as roadworthy and free of mechanical issues that could increase the likelihood of an accident. Employers will generally keep a register of employees driving work vehicles along with copies of their licences.

You should be well versed in your company’s policies about use of a car for work purposes, whether the car is owned by the company or you, including what is covered by the employer’s insurance policy, what is considered work use, and what happens in the event of an accident.

You should also report any issues with the car or the happening of any accident, however minor, to your employer as soon as possible, and keep the car’s logbooks up to date.

How do you claim compensation for a work vehicle accident

A number of different claims potentially arise if you’re involved in a road accident while driving a car on company business.

If you’re injured in the accident, a workers’ compensation claim to recover medical costs for injuries, lost wages and pain and suffering can be lodged. If you suffer a serious injury and you were not at fault in the accident you should also make a compulsory third party (CTP) claim.

A third party involved in an accident may be able to make a claim against both the employee at fault and the employer for the damage they have sustained.

Expert legal advice can help

Accidents involving work vehicles can be complex, particularly in situations where an employer’s policy on use of the vehicle is unclear or less than comprehensive. Accidents where fault for the incident is unclear, where the delineation between work and personal use is unclear, or where it’s uncertain whether a driver is an employee or a contractor, can all complicate a claim for compensation.

Additionally, while a driver’s employer may be vicariously liable for the costs of the accident, the employee may still be able to make claims for personal injury to compensate for the damage they have suffered.

At BPC personal injury Lawyers, we are award-winning Sydney  worker compensation claim specialists with many years’ experience representing clients in matters such as claims arising from accidents occurring while driving a vehicle for work. Call us for an initial consultation and more information if anything in this post reflects your circumstances.