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Who is responsible when a company car is involved in an accident?

On Behalf of | Apr 26, 2023 | Car Accidents

If you are a Texas resident who drives a company vehicle, you may wonder what would happen and who would be held legally responsible if you have an accident. This is a common question, but it does not have a straightforward answer. If the other driver acted negligently, they would be liable for your harm. If you were at fault, either you or your employer could be held responsible depending on what you were doing at the time of the crash.


Company auto insurance policies cover car accident damage and injuries regardless as to whether or not the covered vehicle was being used for business purposes when it crashed. This means that your employer’s insurance company would likely compensate the other driver if you cause an accident while driving a company car. However, your employer’s insurance policy limits may not be high enough to adequately compensate the other driver if they were seriously injured or driving an expensive car that was badly damaged. In this situation, the other driver would probably file a lawsuit.

Respondeat superior

This lawsuit would be filed against your employer under the legal doctrine of respondeat superior if you were engaged in job-related activities at the time of the accident. This doctrine holds employers vicariously responsible for the negligent acts of employees that occur withing the scope of their employment. Your employer could also be held responsible if the accident was caused by botched repairs or inadequate maintenance. If you were not on company business when you crashed, the other driver would probably sue you.


Having an accident in a company car could lead to a lawsuit if the other driver is badly hurt or their car is totaled. If the accident happens while the vehicle is being used to conduct business or business-related activities, the company would be liable under the legal doctrine of respondeat superior. If the car was being driven outside the scope of employment, the employee would be liable.