Insuring employees who drive for work, whether for incidental job-related activities or regularly, is a natural part of the risk management process. Auto accidents can involve layers of complexity and cost that aren’t often seen in other job-related incidents. Multiple people with injuries, a complex interplay of different applicable insurance policies, and the risk of fatalities are just a few of the reasons why auto insurance is a distinct category.
Finding the fault line between auto insurance and workers’ comp
The border between auto insurance and workers’ compensation is defined by applicable state laws and insurance policies. Just as you might expect, finding this border isn’t straightforward and often depends upon the particular facts of the accident. Most businesses need the help of a risk management professional to ensure they don’t have gaps in coverage that could leave the business exposed to significant costs.
Workers’ compensation in many jurisdictions, like California, is a no fault form of insurance. That means an eligible employee is entitled to benefits regardless of whether the employee was at fault in causing the accident. The same is not true of auto insurance, which imposes costs on the at-fault driver.
When an employee is injured while driving for work, the employee may simultaneously make a workers’ compensation claim and a claim (or litigation) against the at-fault driver’s insurance policy. The two systems offer different benefits. If the workers’ comp provider pays expenses that should be covered by the at-fault driver, the workers’ comp insurer will seek reimbursement through a process called subrogation during the course of a personal injury lawsuit.
All of this can get pretty complex. For the employer, which may be on the hook for some expenses and not others, it’s important to have reliable service from its insurance providers to navigate the process.
Take steps to lower risk before an accident happens
These are some of the ways an employer can manage the risk of auto accidents involving their employees:
- Have a written policy governing employee drivers.
Employee drivers must be held accountable for safe driving practices. A company’s policy should cover important topics like whether an employee may have passengers and whether side trips are permitted. Employers also must be proactive to screen employees for prior DUI convictions or other red flags that might disqualify them from driving for the company. Quite often these requirements are imposed by the insurer.
- Have a plan.
Assume that an accident will happen at some point and the company will need to respond appropriately. The aftermath of a car crash is more difficult to manage than a typical workplace accident, for several reasons. The accident takes place far from the office. The employer may not learn of the accident until after an injured employee has been admitted to a hospital. The employee may make statements after the accident that affect how fault will be determined.
Planning for these eventualities will provide the in-house team with a clear set of guidelines for minimizing the financial consequences of an accident. For example, if an employee was admitted to a hospital outside the appropriate insurer’s coverage network, steps may need to be taken to coordinate a transfer (assuming, of course, that it can be done safely).
- Investigate accidents.
When an employee gets into an accident the employer may have very little time to gather key facts about the incident. If possible, the employer should send a representative to the accident location to take pictures, make a record of witness information, and gather other facts. Above all, the employer should make contact with the employee, determine the extent of his or her injuries, and begin to serve as the employee’s advocate.
The need to investigate is paramount regardless of who is at fault in the accident. Remember, workers’ compensation is a no-fault system. The company may have insurance obligations regardless of who is responsible for the accident.
Gunnin improves risk management outcomes
The team at Gunnin Insurance provides clients with complete insurance and risk management support. Whether your business employs a regular staff of delivery drivers or just wants to protect itself from risks associated with occasional business-related driving, we can help. Call us at (833) 486-6461 to schedule an appointment.