Human Resource Blog

Car rental damage during business trip

We are a company in California. A former employee was contacted by a car rental company regarding a recent trip he took to our office in a rental car (the former employee resides in Oregon). When he returned the car, there were bumps and scratches on the car that he was not aware of.
My question is at this point I don’t know whether the damage was caused by the former employee or was by a 3rd party.
Are we responsible for the damages if the employee caused an accident while he was on business?

You need to consult an attorney regarding this liability. It will depend upon a number of issues, including whether or not the employee was considered working when he was driving the car. (He probably was if it was a business trip.) You may well be responsible for the damages even if they were caused by a third party while the employee was renting the car.

Unfortunately, this situation is fairly common with rental car companies. Often, it is the rental car companys word alone that the scratches were not on the car when they employee rented it, and were on the car when the employee returned it.

If your employees travel regularly, this situation may be covered by your usual business insurance. Many companies require that employees purchase the rental car companies insurance coverage (and reimburse the employee) for exactly this reason.