Does my insurance cover someone who borrows my car? Whose insurance would pay a claim if the borrower was involved in an accident? These are some questions that will be covered in this four-part Vicarious Liability series. According to Jeanne Salvatore, a spokesperson for the Insurance Information Institute, usually when you lend someone your vehicle, your insurance will cover potential costs of an accident. She noted that the vehicle owner must have granted the borrower permission to use the vehicle--which may be granted verbally. In some cases and circumstances there are exceptions; therefore, it is important to review your individual auto policy provisions. Even if the borrower has their own policy, the lender's policy will usually be the primary source of coverage. Policy terms may vary by insurance provider, state laws, etc.
Vicarious Liability & Imputed Negligence
In tort law, certain special relationships may impose legal responsibility upon a party that results from the actions of another party. Examples of such relationships include parent/child, company/employee, and vehicle owner/other drivers. The legal doctrine of vicarious liability potentially makes a party, other than the one who actually demonstrated the negligence, liable for damages associated with accident injuries. Also referred to as imputed negligence, this is an exception to the general rule that a person is not responsible for the actions of another. The doctrine of Respondeat Superior, meaning “let the master answer” in Latin is a term used when the special relationship is between an employer and their employee. This makes an employer liable for their negligent actions when these acts occur during the scope of their work duties.
Family Car Doctrine
Colorado's Family Car Doctrine was originally enacted in Hutchins v. Haffner, where a husband was deemed responsible for his wife's negligent driving of the family car. The basis was that the wife was using the car to complete tasks for the household acting as an “agent”. Next, the doctrine was applied in Boyd v. Close, where a widow was deemed responsible for the negligent driving of her son. In these early cases, the defendant was always the head of household, and the accidents were caused by other household members. The doctrine “imputes” liability to the head of household when another member of the household uses a vehicle that he or she has control over.
Colorado has negligent entrustment laws, which differ from the other examples of vicarious liability. In these claims, plaintiffs must prove the following:
- An employee was permitted (entrusted) to use a vehicle
- The vehicle was under the control of the defendant
- The defendant was aware (or should have been) that the employee's operation of the vehicle would cause a probable risk of harm to others
- The vehicle was operated in a negligent manner and this negligence was the cause of the injuries
U.S Court of Appeals Case
Selective Insurance Co. v. Sullivan & Omni Custom Meats was heard by the Court of Appeals Sixth District. Here, the insurance company disputed that they were liable to pay for damages when the daughter of the business owners had borrowed a vehicle. Selective Insurance issued a policy to Omni for commercial automobile and umbrella liability insurance. The owners had a Mercedes Benz that was covered. Davida Sullivan, the daughter of the owners, who was not named on the policy, was driving when the accident occurred. Sullivan had worked for Omni in the past, but not at the time of the accident, and the owners (parents) allowed her to drive the vehicle for “business use.”
The policy terms insured Omni for any named automobile as well as anyone given permission to use those vehicles. The court determined that Sullivan was not covered under the policy when the accident occurred, thus, Selective Insurance was not responsible. Her usage of the vehicle was not considered “borrowing”, as it was not temporary in nature, and there was no expectation that she would return it in any time frame. As it was, when the accident occurred, she was running personal errands--not for Omni's benefit.
Each of the above topics will be discussed in further detail in the next three blogs. Be sure to come back and read each one, as you never know when it might affect you one day.