If I was in an accident while delivering pizzas and had been told that liability was “good enough” but it isn’t, can my franchisee be held responsible?

I had inquired twice about insurance. Both times I was told that liability would cover me. If she can be held responsible is there any way of pointing this out without going to court?

Asked on December 2, 2011 under Accident Law, Minnesota


L.P., Member, Pennsylvania and New Jersey Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Thank you for submitting your question relating to liability for employees and franchisees involved in an automobile accident.  First you should know that states vary regarding the minimum requirements for the type of insurance and amount on the policy in order to be considered legally insured.  Usually when people say that liability insurance is “good enough” that means that legally you are required to cover a minimum amount of coverage for liability, but not necessarily for collision.  This in turn means that while you have to pay premiums to cover you in case you cause damage to someone else’s vehicle, you do not necessarily have to carry insurance to pay for your own vehicle if it should become damaged.

Plaintiffs in accidents with company drivers can sue both the driver and the business.  A company can be held liable for the negligence of their drivers under a legal theory called “respondeat superior.”  Under this theory of law, the injured party would need to demonstrate that the company exercises some form of control over the driver (such as company policies explained in a employee handbook) and that the driver was operating the vehicle during the course of employment. 

Plaintiffs have an additional factor to prove in these actions.  Not only do they need to show that the driver failed to exercise a reasonable duty of care while operating the vehicle and that the plaintiff sustained compensable injuries, but they also need to demonstrate the required relationship between the business and the driver to list the business as an additional defendant.  The insurance company for the plaintiff will likely pursue the party that has the money to pay for the accident, which in most cases is the business entity.

If you should need further assistance, you should contact an insurance defense attorney in your area that could lend more guidance on your specific set of circumstances.  


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