Vicarious liability for automobile accidents

Suppose your employees are on the road as a part of their job. In that case, a common concern for any company is what happens if that employee is in an accident, which causes property damage or personal injury to other persons. Put simply, the owner of a vehicle can be held responsible for the injury caused by negligence while driving. However, the employer can also be held responsible for an employee’s driving even when using the employee’s own vehicle. This is called vicarious liability, or in legalese, it is known as the doctrine of respondeat superior (let the master answer).

This topic can be somewhat convoluted because at first blush, it isn’t clear where the line is between the employee’s liability for their own negligence compared to a company’s liability for its employee’s actions.

The common law rule is that we are all responsible for our own actions. When driving, we owe everyone on the road a duty to drive safely. If one is negligent in driving down the road such that they cause an accident, the negligent driver will be held accountable.

In Iowa, there are at least two ways that an employer can be held responsible for employee automobile accidents. The first is through the Owner’s Responsibility Law. This law provides that when damage is caused by a negligent driver, and the vehicle is being driven with the owner’s consent, the owner is liable for the damages caused. (This is a good reason to be cautious about who you lend your personal vehicle to, but it is also a reason why we have insurance coverage.)Another name for this type of liability is “negligent entrustment,” meaning that you as the owner were negligent for entrusting your vehicle to be driven by someone who then causes an accident.

Another way the employer can be held responsible for the employee’s accident is when the employer asks the employee to drive as a part of their employment. For example, if an employee has to travel from an office to a client’s location, that employee is then acting “within the scope of their employment.” It is important to note that this is not the same thing as commuting to and from home to the office every day. It is generally held that the daily commute is not within the scope of employment.

In both of these cases, the employer’s liability stems from the relationship between the employer and employee (either through scope of employment or the fact that the employer owns the vehicle being driven). So, suppose an employee is negligent while driving for work purposes. In that case, the employer can absolutely expect that it will be named in any subsequent lawsuit in addition to the employee who was driving.

How is this fair to the employer? After all, the employee was the one who was at fault. Why should the employer have to pay? All negligence stems from a duty that is owed and when that duty is breached. The employee driving has a duty to drive in such a way as not to cause an accident. Likewise, the employer has a duty to ensure that its employees are safe drivers.

As with everything, there are exceptions. One such exception is if the employee does something intentional as opposed to accidental, that changes the analysis. For example, if the employee commits an act of road rage and runs a car off the road, the employer will generally not be held responsible.

There are things that an employer can and should do to protect itself from these types of problems. First and foremost is having adequate insurance coverage and addressing both scenarios of employee-owned and company-owned vehicles. If it’s been a while, businesses should review their policy coverage to ensure that employee drivers’ actions will be covered. It is also important to understand any limitations on that coverage. For example, the insurance policy may have requirements that employers must meet before allowing an employee to drive in order to ensure that employees are covered.

Other actions that employers should take include: ensuring that the employee has a valid driver’s license, checking the employee’s driving record, making sure that the employee also has valid vehicle insurance if driving an employee-owned vehicle. Failing to do basic due diligence about employee drivers is just asking for trouble.

These issues are not simple or straightforward. Often the issues discussed here are intertwined. If an employee is in an accident, it’s important to get prompt legal advice and raise it to your insurance carrier’s attention. 

Jonathan Schmidt is the principal attorney with 303 Legal, P.C. He practices in the areas of business and litigation. He can be contacted at or