When an employee is in an accident while driving the company’s car, is the company’s insurer liable? Generally, an employer is liable for employee accidents when driving a company car for employment duties. This can be difficult to determine in situations such as when an employee is on call and operating a company car, when the employee drives the company car at night, or when the employee drives the car on a personal errand with passengers. An accident involving St. Tammany Parish helped shed light on these issues.
On May 26, 2010, Gary Michael Brown, an employee of J&J Diving Corporation, was involved in a car accident with a St. Tammany Parish Sheriff’s department vehicle driven by Deputy Scott Jarred. Mr. Brown was driving a company car at the time of the accident with his girlfriend as a passenger. While Mr. Brown was not legally intoxicated, a field sobriety test indicated that he had been drinking before the accident. Before the accident, Mr. Brown had gone to retrieve his driver’s license from Gulfport, Mississippi after a company drag race event.
Jarred settled his claims with Brown, J&J Diving and Progressive, the company’s primary insurer. However, Mr. Jarred later added XL Special Insurance Company and Valiant Insurance (“Underwriters”) who insured J&J Corporation with a Marines Excess Liability Policy (“excess commercial insurance policy”) as defendants. The trial court granted Mr. Jarred’s motion for summary judgment and found the Underwriters were liable for the accident under J&J Diving Corporation’s excess commercial insurance policy. The Underwriters appealed, arguing that their insurance policy did not cover Mr. Jarred’s accident.