Businesses routinely send employees on company errands in their personal vehicles. In many companies, it would be hard to find a day when one employee or another does not jump in the car before or after work, or during lunch, to make a bank deposit, swing by the post office, pick up lunch for the staff, or run some other simple errand. What kind of legal risks does a company face if someone gets hurt in an accident caused by such an employee?
General Rule: Employers Liable for Acts of Employees
It is a general principle of law in California that employers are liable for injury caused by employees who are acting “within the course and scope of their employment.” Attorneys refer to this principle of liability with the Latin phrase “respondeat superior.”
For example, a pizzeria is liable when its delivery driver causes an accident while delivering pizza. A home improvement store will be liable when its stocker topples merchandise off a high shelf onto a customer.
“Going and Coming Rule”
Employers are not ordinarily liable for injury caused by an employee during his or her normal commute to or from work because commuting is not part of the course and scope of employment.
Special Errand Exception
Not all personal driving activities fall outside the course and scope of employment. An employee running a special business errand is deemed to be within the course and scope of employment. The errand can be done either as a part of regular duties or at the specific request or order of the employer. Importantly, the entire trip counts as part of the course and scope of employment, from the start of the errand until the employee returns to the work place or departs from the errand for personal reasons.
Courts have been fairly strict about when the errand becomes personal, requiring a “substantial departure” for personal business before respondeat superior liability ends. In many cases, running a business errand on the way to work or on the way home will cause the entire trip to fall within the course and scope of employment.
For example, an employer may be liable for injuries caused an employee who is asked to make a bank deposit on the way home from work, and who after making the deposit causes an accident on the way home.
Minimizing the Risk
The right kind of insurance coverage is a must. Every business ought to purchase “nonowned” automobile insurance coverage. This insurance covers accidents caused by employees driving their own cars (i.e., cars not owned by the company).
Even with suitable insurance, litigation will be an unwelcome distraction, and quite possibly harm business in broader ways. Consider the possibility of respondeat superior liability any time that an employee is asked to run an errand or drive on company business. Implement company policies regarding the use of personal vehicles for company business. Limit the number of company errands and the employees who run them. Restrict errands to business matters when feasible. A company-wide awareness of the potential for respondeat superior liability, along with appropriate risk management measures, will go a long way keeping the company out of legal tangles.