Why would someone sue my company and not the specific driver that hit them in an auto accident?

Question

I own a very small company than employees drivers.  One of our driver's, two years ago, tapped the back of a car.  The lady got out and said she was fine, and there were no damages to either vehicle, we took pics.  Police report was filled out, but police office asked the lady 3 times if she was ok, and on the third time, she said her neck felt stiff.  Two years later, we were served with a lawsuit before the statue of limitations ran out.  The action is against my company, an llc, and not the driver.  My insurance company says not to worry, but I've never been sued before, and if we lost and it went above my $25,000 coverage, I don't have the money to pay.  Should I be worried if there was no damage to the car, and why is my company being sued and not the driver?  It was the driver's negligence.

Robert Lucky · Answer

Typically, if the driver was in the course and scope of his employment, then the company also becomes responsible under a legal principle. Stay in contact with your insurance company and encourage it to settle rather than go to trial where there is a chance of an excess judgment.

David Stoddard · Answer

An employer is responsible for the negligent acts of its employees committed in the course of employment (a legal doctrine called Respondiat Superior). The case sounds as if it will settle within the policy limits.  You may want to consider raising your policy limits in the future and/or purchasing general business liability insurance  (if you already have the latter, it might provide additional coverage for this accident.

Willie Stephen Graves · Answer

Your company was sued because it is liable for the acts of its agents and servants performed within the line and scope of their employment.  It's called respondeat superior or vicarious liability.  The plaintiff's lawyer probably figured out from the accident report that the company owned the vehicle and maintained the insurance policy on it, so that's who he sued.   You're more likely to be struck by lightning than to have to pay out more than $25,000 for a Texas sore neck case.  Quit worrying and get some sleep.  It's your insurance company's problem; that's why you paid the premium.  But first call your insurance agent and up your liability and uninsured/underinsured motorist coverage limits to at least half a million dollars.  If the next accident should maim or kill somebody and you still have only $25,000 worth of insurance, your sleepless nights will be justified. A major accident can wipe out the business you've worked for  or you, and in that case the added UM/UIM coverage can be a great blessing to your family.  You'll be surprised at how little the extra protection costs.  It's one of the best bargains in the insurance industry, and this is coming from a lawyer who has no affection for insurance companies. You might also want to get my book on the subject  it's free.

Jeffrey Lapin · Answer

Initially, I would suggest discussing your questions and concerns with the attorney that your insurance company hired for your company to defend the lawsuit. Generally, a person who is injured by an employee, who was working at the time, has the right to sue the driver, the company or both. As the employer, a company is responsible for the negligence of your employees. This is called "vicarious liability."  Although you do provide some information regarding the accident and the woman's statement, I cannot answer what her case might be worth. I would need a lot more information. People can be injured in accidents with little to no damage to the vehicles involved. In addition, pain stemming from an accident-injury may not start immediately after an accident. Whether the woman was injured, and if so, to what extent, depends on what is contained within her medical records and reports and what her doctors say.  If your insurance policy limits are insufficient to compensate the injured person, he or she can make efforts to collect from your company. If your employee was driving his or her own vehicle, the employee's insurance may also be applicable if your employee-driver is not sued.

James Kelaher · Answer

First, it is not unusual at all for someone not to feel they have been injured at the scene of the accident, but a day or two later find they have suffered what is called "soft tissue injury."  As a matter of fact, that is quite common. In Florida, if you own a car, and that car is driven negligently and causes an accident, the owner of the car is just as responsible as the driver since Florida has a law which makes cars "dangerous instrumentalities" meaning the owner of the car is responsible.  You're also "double dipped" because the person who caused the accident was also your employee, and we have another law called "respondeat superior" which means an employer is responsible for the negligence of the employee.  That may be why they didn't bother to sue the individual driver/employee, but only the company. I almost always sue both the driver and the employer or the owner of the vehicle, but there can be reasons why the attorney chose not to sue the driver. Your insurance company is right not to worry because that is why you have insurance. If there was no property damage to either vehicle, and the person did not report any injuries at the scene, I would imagine your insurance coverage is sufficient to cover the injuries. I would write a letter to the insurance adjuster, however, and just say "please resolve this claim against my company within my policy limits if you have the ability to do so."  That will protect you in the event there's an aberrant verdict which exceeds your policy limits.

Jerrie Weiss · Answer

If the driver was in the course and scope of work for the company, the company is liable and so they always go for the one with the most insurance or the most money to pay.

Ronald Lowry · Answer

It's called vicarious liability. The employer is responsible for the actions of the employee done in the course and scope of the employer's business. You are in business that has people driving for you and you cannot have total control of what goes on with them. You need more than $25,000 in liability coverage. This will likely happen again. To answer the specific question, lawyers sue the employer rather than the driver to avoid the jury sympathizing with the defendant driver.

Gregory Crain · Answer

You own the car.

Thomas Edward Gates · Answer

Was the driver doing his job function and on company business at the time of the accident?  If so, that is one of the reasons the company is being sued.  he other is, the company resources are deeper than the employee's. Because you are an LLC, you personally are protected as long as you have complied with the Operating Agreement and State law.  If necessary, you can close the business and form a new one.

Michael Yeksavich · Answer

The company is sued because of deep pockets.  Turn the case over to your  liability carrier and get more coverage.

Ronald A. Steinberg · Answer

The owner is responsible as well as the driver.  The victim can sue either or both.

Joan Durkin · Answer

Negligent entrustment (you let him/her drive).

David E. Frank · Answer

Your company is liable if the accident occurred during the course and scope of the driver's employment.   Your insurance company will likely get the matter settled well within the policy limits. But you should have a lot more liability coverage than $25,000. Talk to your insurance broker.

Kenneth Ricks · Answer

The plaintiff has sued your company under the theory of Respondeat Superior, basically that the negligent driver (your employee) caused the accident while acting within the course and scope of his employment. As the driver's employer, and likely the owner of the vehicle, the company llc is liable for the acts of their agents/employees.  As for whether or not a minor impact can cause significant injuries the answer is yes with the right circumstances (e.g. turned or otherwise awkward position, pre-existing delicate condition, etc.). As an aside, as a business that employs drivers you ought to have much higher insurance policy limits than $25,000.

Thomas Patton · Answer

Your insurance company is very experienced in evaluating cases, so if they say not to worry, I wouldn't.

Steven Urban · Answer

She has the option to go after both of you.  If the driver was acting  within the course and scope of his employment, your company can be held  liable.  Notwithstanding, your company (and likely its insurance  carrier) should be able to assert a claim for indemnity against the  driver (which will likely trigger action from his carrier).

John T. Wagener · Answer

The short answer is that sometimes it is easier to just sue the employer rather than try and track down the individual.  Generally, employers are responsible for the negligent acts of their employees (or agents) performed within the scope of their employment.  Although there are some exceptions, none seem to apply based on these facts.  If the driver is a current employee, you may want to ask him/her if a claim was made against them, earlier, and resolved. You may also want to ask your insurance broker why you only have $25,000 in coverage when your LLC employs people who are driving, presumably, company vehicles.

John Joseph Ratkowitz · Answer

I can't tell you why the plaintiff did not sue the driver of the vehicle, I would have if I was filing suit. I would have named the company too though. It probably does not matter, because if you are not disputing that the employee was in the course of his employment when the accident happened, then you can be held liable for what your agent does. The plaintiff probably named the company because that is the named insured on the policy.  Your insurance company has an obligation to resolve the case within your coverage limits if they are able to do that to avoid exposing you and your company to an excess judgment. It is hard to tell you whether you have something to worry about without knowing the facts of the case and the scope of the plaintiff's injuries. Your carrier will assign counsel to you, and you should be able to find out this information from him after he has had an opportunity to assess the file.  Good luck.

Linda Chalat · Answer

The following excerpt explains the legal doctrine respondeat superior (copied from Nolo.com):  Job-Related Accidents or Misconduct  Under a legal doctrine sometimes referred to as "respondeat superior" (Latin for "Let the superior answer"), an employer is legally responsible for the actions of its employees. However, this rule applies only if the employee is acting within the course and scope of employment. In other words, the employer will generally be liable if the employee was doing his or her job, carrying out company business, or otherwise acting on the employer's behalf when the incident took place.  The purpose of this rule is fairly simple: to hold employers responsible for the costs of doing business, including the costs of employee carelessness or misconduct. If the injury caused by the employee is simply one of the risks of the business, the employer will have to bear the responsibility.

Dennis P. Mikko · Answer

The owner of an automobile is always responsible for its actions.  Since you are the owner and the person with insurance, you are the likely person to be sued.  The driver probably does not have insurance and or anything of value to collect on if a judgment is awarded.  If there was mininal damage and minimal injury, the person suing may not be able to show a threshold injury amounting to a serious impairment of a bodily function.  If this is true, the suit should be dismissed.  Your insurance company will provide you with a defense and has an obligation to you to resolve the matter within your policy limits.  $25,000 in coverage is minimal.  You may want to speak with your insurance agent about increasing your coverage.

David Blain · Answer

In California, and many other states, there is a legal rule called Respondeat Superior. This just means that an employer (you) is vicariously liable for the injuries caused by his employee (your driver) so long as the employee caused the injury within the course and scope of his employment, i.e. you hired the driver to drive for your company.  Assuming what you say about the damages are true, then this is a very low valued case. Generally speaking, a person who is injured is legally entitled to recover compensatory damages. This means the injured party can recover for their medical bills (past and future), lost wages (past and future), repair costs to their property and any pain and suffering caused by the negligence of your driver. If the old lady's vehicle wasn't damaged, and she had very little, if any medical bills, and she didn't miss work then the value of her case should be very, very small. However, I do not know what her injuries are/were so I can't really say what the value of the case is.  Your insurance company will provide you with a lawyer, but because you only have $25,000.00 in coverage you may want to consider hiring your own attorney to protect you beyond what the insurance company is covering.

David Hibbert · Answer

Relax. The auto insurance company is correct , and they'll defend your company. If there is also a general liability policy for your company , you should notify them as well.  Your employee's collision , while on the job for you , in your company vehicle makes his/her negligence imputable to you.

Jay P. Carmean · Answer

Under the legal theory of respondeat superior, an employer can be held liable for the actions of its employees.  Your insurance should soon hire an attorney to defend this suit and that individual should be able to better answer your questions.

John Brennan · Answer

Your hired driver is your company's agent, therefore they sue your company and/or the individual driver. Your insurance limits, in my estimation, are much too low, have them increased.

Michael Heilmann · Answer

In Michigan, an employer is responsible for the negligent acts of its employee, so a prudent lawyer would always sue all responsible parties.

Houston D. Smith III · Answer

An employer is responsible for the negligent actions of an employee while the employee is operating within the course and scope of employment.  The legal theory is called "respondeat superior" and you will likely see that phrase in the Complaint.  I am surprised that you only carry the legal minimum of liability coverage ($25,000) for a vehicle that is used in commerce; and suggest that you carry $100,000 of both liability and UM coverage.

Leonard Schwartz · Answer

The driver is your agent and employee which makes your company responsible.  Let the insurance company worry about it.

Jared Altman · Answer

They don't have to sue the driver. Let your insurance company handle it.

Stuart Nachbar · Answer

If you employee the driver and own the vehicle, then they can come after   you.  It is up to you to implead the driver and his insurance company.    Normally they sue all persons.  See if they did and if they did not talk to  your carrier about doing it.

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Why would someone sue my company and not the specific driver that hit them in an auto accident?

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