Re: Heads Up: Business Use of Vehicles

No sense in relying on generalizations. Ask your agent.

Absolute rubbish. All it means is that responsibility for insurance rests on your employer. If your employer has you do something in your own car, their insurance policy covers you.

I did the pizza delivery game when I was younger about 20 years ago. It is only worth it if you own a piece of shit car that cost you $600 that you can work on yourself, and you are just going to drive into the ground. Old Toyota Celicas and Hondas with no paint are the kind of thing you use. In my day you used VW Rabbits, Datsun 510's, that sort of car.

If it were my son I'd use it as a learning opportunity for him, I'd go buy a $600 beater for him, and tell him that all proceeds from the delivery job goes to fix problems in the car and pay for car insurance. You also should consider getting a small beater pickup truck, like a toyota or some such, these seem to be a bit tougher for this work. Under no circumstances ever let him drive your car. Pizza delivery really eats up vehicles. But conversely it is fantastic for building driver skills. You have to learn to read maps, plan out your route to avoid traffic disruptions, you have to learn how to make u turns in tight quarters, avoid cops who like to seek out pizza drivers, and of course you get tons of time on the vehicle. The extra experience and learning he could get from this kind of work now could one day in the future save his life in traffic.

Don't worry about the insurance aspect. If it's a national delivery chain they will have insurance that covers it - it won't of course, cover property damage on the vehicle, it will only pay out to someone else if your son smashes into their car in the process of delivering pizza. If he wrecks his own vehicle that is just another learning experience. And also most pizza delivery is done with a 3 mile radius and your on the slower neighborhood roads, not driving around on the highways. So crashes when they do happen are of the bumper thumper, fender bender ones not the high speed ones where people roll the vehicle and get pasted into a tree.

Ted

You really have no idea how UNimportant you really are, do you?? That was one of the dumbest statements I've heard in weeks.

God Bless, Dan'L

(retired cop)

Well, all the cops that I ever met who wern't retired didn't have a sense of humor either. I guess they must train that out of you.

For the record, when I was delivering pizza I never saw a cop nor did any other driver get ticketed when delivering either. The routes normally used by pizza drivers generally run most of the time in neighborhood streets which are hardly ever patrolled, (even today, 20 years later as a homeowner this still ticks me off - I can count the number of times I've seen a police car drive by the house in the last 5 years on the fingers of one hand, but I see them almost every day on the freeway, writing speeding tickets, and I've had cars in my driveway broken into at least 3 times during that time) both because the customers are in the neighborhoods, and because it is faster to cut through 3 different neighborhoods via all the back streets to get 2 miles than to go to the main road and go through 4 traffic lights to get 2 miles. As a result, avoiding cops was pretty low on the priority list.

Ted

No, it still doesen't leave the employee liable. All it means is that the business will have to pony up the extra dough.

Sally Sue drives a pizza truck and smashes up Billy Bob's trans-am in an accident causing $20,000 of damage. Billy Bob files a claim against Sally Sue's employer, PizzaPizza. PizzaPizza has business insurance that only covers a maximum of $10,000. So, Billy Bob will then get a check from PizzaPizza's insurer for $10,000 and will then (hopefully) get a check from PizzaPizza for the other $10,000. If he doesen't he can then sue PizzaPizza (or more likely put in a claim against his own insurance which will then sue PizzaPizza) but none of this puts the liability back to Sally Sue. PizzaPizza is still liable.

No he won't. If it's a true accident then you aren't going to get a manslaughter conviction and it is unlikely the prosecutor is going to file one.

But, using the above example, assume for a moment the driver is drunk, kills someone, and is found guilty of manslaughter. What you are missing is that the issue of victim compensation is a separate civil issue, not a criminal issue. The judge that finds the driver guilty of manslaughter does not have to order restitution, or could only order restitution to cover the states costs of prosecuting. The civil liability still rests with the employer.

Consider the pizza driver example - two pizza delivery drivers come to work drunk and go delivering pizza. One takes a company car and crashes it and kills someone. The other takes his own car and crashes it and kills someone.

Just because the one driver happens to be in his own car doesen't get the business off the hook, as it were.

This is, in fact, one of the most fought over things in business law, several of these decisions have made it all the way to the US Supreme Court. Naturally as you might imagine, employers claim that how can they be liable if, for example, an employee of theirs is high on drugs and crashes a boat full of oil into Prudeho Bay and destroys a billion dollar fishery. But the answer the court has given is essentially, "tough, it's still your fault"

This is why companies that hire pizza drivers are wise to mandate drug tests and background checks and all that hoo-ha.

Makes absolutely no difference. All that means is that the businesses insurer isn't going to pay the claim against the business. However the business is what is liable, not the insurance company. The business will still have to pay out of their operating capital or whatever.

I think you will find for any of the national pizza delivery places (dominos, etc.) this is the case. For the locals, they may have a policy that attempts to skirt this - whether the policy language would be worth spit in court is an entirely different matter. If it's at all in conflict with the state law in effect in the state, it's going to be rejected by the court, regardless of who signed what, and the business will then be able to force the insurer to pay the claim.

Rubbish. This isn't their problem. If something catastrophic happens the whole works is going to end up in a court. And as soon as the business is held to be liable, it makes no difference to the employee what the coverage level is. The victim cannot file a claim against the business, get a payout, then decide they want more money and proceed to file a claim against the driver for more money. The first claim transfers responsibility for the claim to the business, and the business can't then hand it back to the employee.

Frankly, to be perfectly honest, the vast majority of high school students should be studying their lessons after school, not working after school minimum wage jobs. Not studying their lessons is what really has the potential of utter ruination. Unfortunately, however, too many parents out there seem to think that their kids can get by on an allowance of $5 a week, or some such, which is why most kids of that age are very keen to work these minimum wage jobs.

Ted

As a former retaraunt manager of 20+ years (several of which included Pizza Delivery places) I can tell you that is not always (and in fact rarely) the case. Laws vary from state to state and pizza places often list the drivers as sub-contractors which changes things even more. I can assure you in almost all cases if a driver gets in an accident, pulls a lawn job, or anything else they and there insurance company will be paying out and not the business's.

PizzaPizza's

Dead wrong. The burden would be on SallySue's insurer to prove that PizzaPizza wntenly and knowingly aloowed her to drive in a reckless manner which was a leading cause of the accident. While Sally Sue and/or her insurance company may file against PizzaPizza, their odds of winning are low unless PizzaPizza goes for out of court settlement to avoid bad publicity.

This would of course be true as the business did not excercise due caution and let the driver go out drunk.

Yes, but these case were a little more complicated and in fact the two high profile ones which I would assume you are referring to were similar in that the captain had a history of alchohol abuse and had been previously warned by the employer. Yet they still allowed him to operate.

Would be foolish not to, they are driving as a profession and handling company funds.

Ahh, but it is their problem. First liability lies with the driver (employee). The business carries the insurance to cover any possible liability claims that *may* also be brought against it. In America the combination of blood-sucking lawyers and the publics 'I'll Sue!" attitude is why everyone carries such high insurance coverage.

Or maybe because many families today can not afford to dole out $20-30 to 3 or 4 kids every week. And since when has it been unusual for a high school kid to get an after school job? Unless of course their name is Bif or Buffy !

Which one is stupid?

The "you have to learn how to make u turns in tight quarters" or "avoid cops who like to seek out pizza drivers"

KS

I do not know about the USA, and American law. In Canada, If I use MY car for business use (ie. delivering Pizza) my car must be insured for business use, and any accidents I am involved in are STRICTLY my fault - Only I will be charged, MY insurance pays the damages, MY licence gets the demerit points, and MY insurance rates go though the roof. This is why the vast majority of Pizza shops do NOT own their own cars any more. They would be uninsurable after a few accidents. Now the DRIVER is uninsurable. The Pizza business continues on it's merry way, unincumbered. The legal situation is I am a self employed "broker", running my own business delivering Pizza for, say, Pizza Pizza. I charge my expenses against my income from delivering pizza when it comes income tax time. What they pay me for delivery is written off as an expense at their end.

If I am using my car to deliver Pizza, and have NOT declared the business use to my insurer, and get involved in an accident, things will VERY quickly become VERY interesting between myself and my insurance company. My insurance contract will be voided, as they did NOT contract to protect me using my vehicle for business use.

Now, what 16 year old kid can afford to fully insure his vehicle on a minimum wage after school job, even for PERSONAL use? Business use insurance for an under 25 male driver is virtually impossible to buy at any price (Only Facility is even an option).

Well, it's been over 20 years since I did Dominos and at the time they certainly wern't doing that. In any case if a place does that, this entire discussion is moot anyway, since the minimum wage laws only apply to employees, not subcontractors. It wouldn't surprise me one bit if the hole-in-the-wall places did this as SOP, though, even though it's illegal.

In my years in the software industry we have seen the IRS and the state wage people sue and win against a number of software companies in the last decade who claimed their programmers were self-employed contractors, and thus the software company didn't have to pay withholding. Originally the IRS ignored these arraingements but when the numbers of "subcontractors" who were pulling down $200K a year working for years and years for these companies reached seriously large porportions, I think the IRS got sick of it. Particularly since nowadays they are hanging stuff like childsupport payments and such on tax and wage garnishments. By the time the mid 90's rolled around there were a lot of these big name software companies that were really getting hit bad, and by the late 90's most of them were getting out of that game. Last I dealt with this the rules were that if the subcontractor isn't working on a single defined project that has a defined end date, but are just working on company projects like any other software developer, that after 90 days they have to hire them full time or tell them to get lost. I'm quite sure over the past 5 years things have been changed yet again.

This is why there was a huge spike in growth of temporary agencies that specialized in high tech in the last 90's, a lot of these companies just made these "subcontractors" get full time jobs with the temp agencies (who then had to do the FICA and withholding and such) I'm sure that the IRS isn't bothering with pizza places because the withholding amounts are minor compared to a house full of "software contractors" all making $100,000+ a year, which is probably why a lot of these places are doing this, but it doesen't make it legal.

But knowing the restaurant industry I am quite sure that many restaurants don't give a crap about the legality of workplace rules. A pizza delivery driver that is a subcontractor, that's a tax dodge if there ever was one. How many of these pizza driver "subcontractors" do you think bother to file quarterly withholding?

A lawn job is a minor property claim, it's illegal to boot, but of course if the driver denies it and there's no witnesses, the claim probably will go nowhere.

But more to the point, one of the things that is worth mentioning is how is the injured party going to know if the driver is actually delivering pizza? If the car is unmarked, which most of the pizza delivery people I've seen from the small hole-in-the-wall places we order from are, then if they get in a crash or some such, the driver is probably not going to admit that he was working. Without proof of this the insurer isn't going to be able to get out of paying.

I think this is one of those dirty little secrets in the pizza delivery game. If the MO these days is for the restaurant to set the employee up as a contractor, I would bet lunch that for anyone doing this, that just about all these accidents that the accident is written up as private owner of car smacks into other private owner of car, and that nobody breathes a word that anyone was engaged in any business activity. Whether the accident is pizza driver is at fault or person that collides with the driver is at fault, neither party in the accident has any vested interest in bringing this up.

Why would Sally Sue be carrying insurance on PizzaPizza's pizza truck? She may not even own a vehicle of hers at all.

But that is for their -own- liability coverage. It is not a concern of the employee to bother checking their employers liability coverage limit, as Nomen said. As I said, once the business is held to be liable, the employee is off the hook, the victim can't touch them.

The $64 question is really can the business, once it's held liable, turn around and sue the employee to recover damages? Well, sure they can sue, but I don't think it would be that winnable, unless you had proof for example that the employee deliberately broke the law. An auto accident isn't going to match that criteria except in certain specific circumstances. Particularly if a cop shows up and doesen't write either party in the accident a ticket.

Recall the McDonalds scalding coffee incident. The employee that handed the hot coffee to the victim wasn't sued by the victim. The victim sued McDonalds and got money from them.

I will say in my last post one thing though, I was deliberately not addressing situations where the driver showed intent to cause the accident. The original poster was asking about his kid doing delivery and having an accident. To me that implies a lack of intent. ie: I made the assumption that his kid wasn't looking for a delivery job so as to be able to run out and deliberately cause accidents. Thus, I really wasn't talking about a situation like you were where a reckless driving charge or defacing property charge or DUI would be applicable. (and no, I do not consider collisions as a result of drunk driving to be "accidents" I consider them in the class of assault, murder, etc. depending on what the results of the collision are. I do not believe that drunks "accidentally" drive their cars. They deliberately drive them, and to argue that adults in this day and age don't know what the results of drunk driving are is poppycock)

:-) I thought of that too - of course, my spouse and I only have 2 kids and won't have any more. We have a philosophy that people are responsible for their children. If a family decides to bring 3 or 4 kids into the world they have to accept that they are responsible for those children, that includes paying allowances to those children that will meet their reasonable expenses, as long as they are minors. Unfortunately it appears too many parents these days seem to feel that their responsibility is to f*ck each other and pop out the brat, then dump him on the rest of society to raise. And note I said "raise" not "pay for"

Look at the average GPA and the dropout rates over the last 40 years and you will see an alarming rise. People like to blame television for this but there are other factors as well - such as after school jobs.

It is one thing for an after school job for a high schooler to consist of

2-3 hours a couple times a week helping some company to file papers or answer the phone. But restaurant jobs particularly fast food are in my experience, very dangerous. And know that I worked after school in fast food starting the summer before my junior year and continuing through high school graduation. And at the time I loved doing it, there were times that I was pulling 25-35 hours a week.

In hindsight now that I'm older I now realize that most of the money I got doing that was wasted, I didn't learn to manage my money until I was living on my own years later. And a lot of time I spent socializing at work with my friends who were also working, was time that I should have been getting better grades.

The only time that a minimum wage job after school for a high school student is going to help the kid learn the value of money, or get a work ethic, or some such, is if the kid is living on their own and responsible for ALL their own expenses, including housing, food, clothing, etc. But if the kid is living at home with mommy and daddy and getting free room and board, the extra money from the job doesn't teach them a thing. By contrast, it just lets them buy expensive schlock like music CD's video games, junk food, tv sets, stereos, designer clothes, all of which get them accustomed to expensive tastes. Then when they finally are pushed out of the nest the reality is a horrible shock. And if by any chance they happen to have a credit card then, it's ruination.

Ted

Straight out of "Toy Story". :-)