Road mishaps happen even with the best drivers and despite doing everything you can to drive safely. Apart from the injuries, the worst thing about accidents is that they can be expensive, particularly if you end up injuring someone due to your negligence. Calculating the costs of a car accident is fairly straightforward if you crash your own car. If you are insured, the cost will be your insurance excess and few other minor costs unless you or the other party is seriously injured. Conversely, you will have to pay for damages and third-party injuries out of pocket if you are not insured.
On the other hand, the magnitude of accident costs may be much higher if it happens with a company vehicle. You may have to pay compensation to the employee and the third-party victim. Additionally, the driver may have to go off work if the injuries are serious. There is a lot more you may have to deal with, sometimes implications as serious as reputational damage. Certainly, you would want to know how much a company vehicle accident may cost your business. Here is the breakdown of the costs it can lead to.
When an accident involves a company car, the insurance excess maybe a few hundred dollars. But the amount could be much greater for larger vehicles or when serious injuries are involved, which can be a pain in the neck. Moreover, the absence of proper coverage may get you in a fix because you will have to bear the damages out of pocket. It is to be noted that business owners are held liable for the company car accidents under the vicarious liability clause, even if the mishap happens when an employee is driving. If someone is seriously injured, the compensation value may be massive. For this reason, proper insurance is something that business owners should never go slack with.
The cost of company car accidents for a business may be much greater if a lawsuit comes your way, whether from an injured employee or someone else injured in the accident. While you may resolve the workers’ compensation claim internally, things can get challenging if a third party victim files a lawsuit. They will get a car accident attorney to fight for the claim and you will have to be prepared for a long legal battle as well. The cost of the lawsuit and potential damage claim can be massive enough to cause an unprecedented burden on any business. Apart from the financial aspects, you may have to spend a lot of time in court, which again can be expensive for the company.
The business will also have to bear the cost of lost revenue because of the damage to their vehicle and any goods or equipment inside it. Further, injury to the employee can put them off work for a few weeks. In both cases, you will end up with an interruption for the business as damaged vehicles and absent employees affect your workflow. Things could get serious is the employee is working on a critical contract and it cannot be completed on time. There could be punitive damages due to breach of contract and you may even lose the client forever.
Re-staffing or temporary workers
The cost of an accident to the company can get elevated if the injuries to the employee are serious enough to send them off work for an extended period. You will have to fill their position with re-staffing or getting in a temporary contractor for managing the workload. The hiring process is never easy, particularly when you need to fill in a senior role. There will be a cost of training as well. Further, you can also add up the time lag between the mishap and new hire to calculate the overall cost to the company.
Another expense that you cannot ignore relates to administrative tasks associated with managing the vehicle repairs or organizing a replacement as the need may be. Things can be simple enough if it’s just a car but the costs may run high if the mishap involves an expensive vehicle or there is a loss of goods involved. Further, your administrative team will have accident reports to deal with. They will also have to liaise with the client or other parties affected by the mishap.
Considering the burdens that a company car mishap can exert on your business, it makes sense to prevent such accidents in the first place. A proper risk mitigation plan with a safe driving policy, driver training, and vehicle maintenance can cover your business to a considerable extent. Also, getting proper insurance coverage for all your company vehicles is mandatory.
Robert Garcia- Robert is a freelance graphic designer and adores to write business based content. Apart from his profession, he is a father of two children and dreams to own a Nissan GTR one day.