View Full Version : Accidents/Insurance Deductible

02-18-2001, 09:49 AM
Need some advice, are employee book and a memo we issued regarding snow removal state if you are at fault for an accident you are liable for the insurance deductible. This last week we had an employee go to clear a school parking lot late in the afternoon (after school was out) He was told to not use the interstate either coming or going from the job. 630PM that night he calls me and he has jacked knifed the trailer and tipped it over on the interstate. The trailer is a total loss, the tail gate on the truck is toast and the bobcat 873 at minimum has brokeen engine mounts, cage is lost and one rocker arm is in question. Plus the light pole that he snapped off. Insurance company of course is not happy and he has been removed from approved drivers. Based on towing charges and deductibles he is at $1200.00 how do you go about being fair to the employee but enforcing the deductible since other employees have had to pay for minor fender benders but nothing like this.

John Allin
02-18-2001, 10:47 AM

The joys of self employment....

Ouch !

I'll be this hurts alot. It would hurt us and burn me up big time.

I don't have any answer/advice that will make you feel better.

We would can the employee (for cause - "failure to follow specific instructions"), take the hit and move on.

02-18-2001, 11:15 AM
In the Police Department, If the accident was found to be are falt we would have to pay a percentage of the cost, lose are department drivers licence for a time and may be a few days pay. This maybe a little harsh for you guy thought.

02-18-2001, 11:25 AM
I would think you would have a hard time, legally, requiring anyone to pay the deductible portion of your insurance. After all, it's your insurance, you took out the insurance and decided on the deductible. How about a system of fines, instead or firing him for not following the rules? How are you going to collect? Just withhold his paycheck? Then he'd just quit and you still don't collect. Interesting situation.


John Allin
02-18-2001, 02:05 PM
My understanding of the law (and we have a labor lawyer on retainer) is that if your employee handbook specifically states that you can take money from the employee in the case of negligence, and if the employee signs that he got the handbook and agrees to abide by your policies - then it is legal to deduct the money as long as you don't take the amount left for the employee down under minimum wage (Federal law is specific that all employees MUST get minimum wage no matter what).

However, as noted above - if you start deducting it and the employee quits.... you're SOL.

Interesting separate issue (somewhat along these lines).... we have a clause in our handbook that if an hourly employee quits without giving two weeks notice, then any wages due him/her are then paid at "minimum wage". We have had this for a few years now. We pay every two weeks, so this can mean that as much as two weeks pay is done at 'minimum wage'. We had it challenged recently (by two employees that quit without notice, got their last paycheck and went to the labor board bitchin up a storm). Labor Board went to bat for them and instructed us to pay them the actual wage they were at when they quit. We fought it (with our labor lawyer) and won on appeal. It was upheld as legal because the employees agreed to in by signing for the handbook and agreeing to the contents contained therein, and we didn't take them below minimum wage as required by federal law. Grumbling stopped when THAT got out amongst the troops.

02-18-2001, 03:48 PM
When I worked at a car dealer I was responsible for the deductible ($1000) on any car I took home for personal use-if I didnt agree I didnt have to take the car. But state law prohibited the dealer for charging deductible for car use for business.

Better check with a lawyer for what is or is not legal in your state. Before the employee beats you to it.

02-18-2001, 06:06 PM
Along those lines of insurance and employees. My Dad is retired but works another job as a car salesman. He quit a dealer after about three months. He got a 1099 Miscellaneous income form from the dealer. They turned in $75.00. When Dad called and inquired as to where this money was or went, he was told it was his insurance premium they paid ON HIS BEHALF for being covered to drive their cars!

Randy Scott
02-18-2001, 10:08 PM
What caused the accident? Was it his fault? Just curious. I know he shouldn't have been on the interstate but what happened? Sounds like a bad situation. That's too bad the insurance company isn't happy. That's what you pay the fricken' insurance for! For damage, for accidents, for things like this, not their opinion or attitude. You mean this guy was removed from approved drivers because of one accident? I don't mean to sound like I'm taking his side, I'm not, if he screwed up big time then he needs to be " handled", but I am sick of insurance companies and their BS. I deal with it every day and the way they try to manipulate the little ol' insured person. I hope it works out for you and good luck with your employee.:)

02-19-2001, 09:57 AM
In VA it is against the law for the employer to hold an employee financially liable for any damage or lost property. The employer can discipline the employee with days off w/o pay or termination.

02-19-2001, 09:00 PM
If you can't cover your insurance deductible, maybe you should look at your biz. Why is the deductible so high? The employee could say in court, that he was not informed how high your deuctible was? He could say he assumed it was lower, all kinds of things could come up.

I could understand you wanting them to pay the deductible, however I only feel that would be fair if they were plowing and not traveling. Sometimes crap happens and thats why you have insurance. I myself don't require employees to pay damages on trucks, it is part of business. They are useing your equipment to make you money, and sometimes crap happens.

If you hit your employee up for 1200 hundered bucks how do they feel. How long will it take them to earn 1200? What about there other expenses? How do you expect them to live? How do you think they will feel towards you and your company? Your employee may be so afraid of hitting or breaking something again, they might be to scared to work for you. Then you have no employee to opperate your equipment to make you money.

The end result:

He was useing your equipment to make you money, how much has he made you this year? Vs how much have you paid him?

Is it even legal to do this?

For a 200 dollar basketball hoop I could see this, for 1200 bucks I think it's crap.

Oh yea he said he jack knifed the trailer, so he might be saying it is his fault. However when you try to hit him up for 1200 bucks, what will he say? Is he going to say a car stopped quick, the roads were in poor condition, ect. What if the trailer was overloaded, or unsafe. All kinds of things could come up. Then it might not be his fault. Just like if we leave a lot in poor condition and someone gets hurt, who do they go after?

My advice pay the deductable, it's part of biz. It could have been worse, what if someone was hurt or killed.


[Edited by GeoffDiamond on 02-19-2001 at 08:20 PM]

Randy Scott
02-19-2001, 09:12 PM
Goeff, he wasn't supposed to be on the interstate, but he was. I don't know what else he did wrong if anything, or everything. capital hasn't responded back to this thread yet, so I don't know how much of a screw up or not he is. Just thought I'd mention that, otherwise I agree with what you're saying. I guess how much he screws up or not would only lead to his dismissal, I don't think I would charge him the deductible, that is the cost of doing business.

02-19-2001, 09:49 PM
"employee book and a memo we issued regarding snow removal state if you are at fault for an accident you are liable for the insurance deductible"

You never state in your post whether the accident was the employees fault or not only that he was on the I when he wasnt supposed to be.

What caused the accident?

02-19-2001, 09:57 PM
So what difference does it make if he was on the Interstate or not? Other than disobeying your command. And it sounds to me like you're more pissed that he took the highway than you are about the damage. Was there something about being on the highway that caused the accident? Why didn't you want him on the interstate? I tend to think that it's the safest place to be hauling a trailer.

02-20-2001, 09:56 AM
Regarding some of the post regarding the insurance deductible. My insurance is the norm. IE my deductibles are not high or low. They are as follows:

commerical Auto $500.00 (trailer)
Inland Marine $250.00 (Bobcat)
Comprehensive $100.00 (light pole)
Towing charge $371.00 (not covered)

Some also question why he was told not to be on the interstate, it was rush hour and from where he was coming it was quicker to take a 4 lane road back from the job site, which he was told to take. There were no other vehicles involved and the pavement was wet but not icy. I would agree that the interstate during normal driving conditions is better with a trailer but not during rush hour traffic on the interstate in down town Des Moines.
I have an email into my attorney regarding the issue if he can be charged the deductible or not, it won't matter any way since after the last snow his truck came back in with two new dents (minor) but no explanation on how they got there. So its time to cut my loss and find out if the Bobcat can be fixed or is a salvage job. Also, my drivers are paid a higher rate than the other companies that I talk to in my area. So pay and responsiblity come hand in hand and a good driver has taken a turn to the worse.

02-20-2001, 12:25 PM
Hello Everybody:

I would think that you would not get much of an employee if you charged him for his mistakes. Doing this will get you below average employees & they can do serious damage to you in a short period of time.

Most people that fear going into business, is that they will make mistakes & they will have to pay up. Thus keeping a lot from being self employeed.

I do not see how he can be charged anything & if I ever did charge an employee for a mistake. I the next second would take him off my payroll forever, because they could get real mad at you & cost you far more than that wreck?

He did do wrong & I would give him the Crappiest job there is & remind him in front of others in a nice way about what he did? It worked for me? I would ask him infront of others, "Hey Johnny, Phil is fixing to go to the School, which way do you think he should go there?" If he smarts off about it in front of you say "Well no driving Johnny I'm going to buy you another shovel for you, because I think if you are here long enough you will wear that one out? Would you please shovel the drive, I can't afford to let you run any Equipment for now? If we quits you are better off & a good example for the others?

Which would you rather do drive equipment or wear out shovels?

If the guys did wrong in my Lawn Service Business & messed up, well they be pulling weeds & cleaning up after others trim bushes for a while? That works good & very effective?