Your organization is typically liable for injuries caused by employees when they're "acting within the scope of employment." You aren't liable when employees cause injuries on their own free time. But what about the gray area, when workers run personal errands while on business?
A new court ruling raises your risk in such cases, meaning you could be liable when employees make a slight detour while on company business. To protect your organization from those situations, follow these three steps:
1. Draft a clear policy that outlines what employees can and can't do within the scope of their jobs, including whether they're allowed to conduct any personal business on company time.
2. Shift liability whenever possible, or tap a better person for the job. For example, have a courier service make deliveries, instead of employees.
3. Verify employees' driving records and auto insurance before asking them to drive on business. Consider carrying insurance that's typically called "employer's nonowned automobile liability" coverage. It can protect your organization from damages caused by vehicles you don't own but that your employees use for business.
Recent case: While driving to deliver a vendor's gift, a drug-store manager decided to stop at a gas station to request an estimate on some personal car-repair work. But in turning into the gas station, he crashed into another car and injured the driver.
The driver sued the drug store, which countered by saying it wasn't liable because the manager wasn't acting within the scope of his employment when turning into the gas station. But a federal appeals court sided with the injured driver, saying that a jury could conclude that "a proportionately slight or expectable deviation" from the business trip won't erase the employer's liability. (O'Shea v. Welch, American Drug Stores Inc., et.al., No. 02-3343, 10th Cir., 2003)
Final note: If the drug-store manager traveled 30 miles out of his way for an estimate instead of merely making a slight detour, the outcome would likely have been different. Reason: When an employee commits what's known as a "frolic and detour" from his original business purpose, the employer isn't liable. To use that defense, you must prove that the employee's detour 1) wasn't foreseeable and 2) was a significant departure from the employee's main job duties.