Astrix- How would personal injury be handled if "off the clock" or a non - employee passenger? Not sure about everywhere, but I know in Texas you can purchase a 10k MAXIMUM PIP. Doesn't this open up the business owner to liability in the case injuries in an accident?
This is a tough question to answer without writing a whole book on the subject. Auto insurance is enacted as a separate law by each American state or Canadian province. While standardized and similar in many ways, the most complicated and varied part of auto insurance law is how injuries are handled and paid. First off, it will be one of the following three systems:
- Tort (you can sue);
- No-fault (can't sue); or
- Limited no-fault (can sue only if you cross the "threshold" definition of serious, permanent injury).
A/B (PIP) coverage is paid out regardless of which system is used and it doesn't matter who was at fault for the accident. Usually, the driver and passengers get their A/B expenses paid by the insurer of the vehicle in which they were an occupant. (However, there are variations to this general rule which I won't get into here.)
A/B limits are set by law and are not very high. They're okay for minor injuries, but won't be enough in the event of a serious accident. For example, you mentioned a $10,000 PIP limit in Texas. That won't go very far. If fault can be attributed to another vehicle/driver, then the injured person may have the option to sue, which is when a $1 or $2 million Auto Liability limit comes in handy.
While the business owner is not negligent for allowing his employee to drive during off-hours; the point is that liability is attributed to the "vehicle via its driver" and not to the driver personally. So if the employee is driving the company truck and ends up causing an accident that injures other people, then it is the owner of that vehicle (via his auto insurance policy) that will have to pay. The liability and associated costs do not get transferred to the employee's personal car insurance policy. Same goes if the spouse or other family members are borrowing the company truck. (Again, there are variations to this principle which I won't get into at this time.) If the accident is serious enough and you don't have enough commercial auto liability insurance, then your business is responsible for paying any shortfall.
A passenger in a vehicle may sue the driver of the same vehicle both were riding in, if that driver was at fault for the accident. That is why you often see the rule about not having any non-employee passengers in the company vehicle.
Some of the "no-fault" and "limited no-fault" jurisdictions have options where the A/B (PIP) standard coverages/limits can be voluntarily increased by paying extra premium. A few states let you opt out of no-fault, so that you have the choice of being either on a no-fault plan or a tort plan.
Some states/provinces allow "subrogation". So, even if your vehicle's insurer initially pays for a passenger's A/B (PIP), they then may be able to recoup that money from another insurer whose vehicle was at-fault for the accident. For American CT members, here is a link to a table which outlines the basic rules re PIP and subrogation on a state-by-state basis:
Med Pay / PIP Subrogation in all 50 States
There's way more, but I suppose that's enough for now. It's hard to try and explain in generalities all the different scenarios when company vehicles are used for personal use: minor or serious injuries; at-fault or not-at-fault accident; which of the 3 systems applies; who is injured: driver, passenger, other person. If there is a specific scenario that someone has in mind, perhaps they can lay it out, and I will try and answer how that situation would be settled and what the risk exposure is.
P.S. - a few acronyms so we are all on the same page:
- - MedPay = Medical Payments, ie doctor's bills, prescription costs, bills for other therapy such as chiropractor, occupational therapy, etc. (usually under the tort system)
- - PIP = Personal Injury Protection; incl MedPay PLUS funeral expenses, lost time off work, housekeeping, babysitting/daycare costs, etc. (usually under a no-fault system)
- - A/B = Accident Benefits - the term used in Canada and is the same as PIP.