Accidents/Insurance Deductible

Discussion in 'Business Operations' started by capital, Feb 18, 2001.

  1. capital

    capital LawnSite Member
    Messages: 118

    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.
  2. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488


    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.
  3. lawman

    lawman LawnSite Member
    Messages: 199

    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.
  4. MJ

    MJ LawnSite Senior Member
    Messages: 312

    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.

  5. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    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.
  6. thelawnguy

    thelawnguy LawnSite Silver Member
    Messages: 2,411

    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.
  7. Skookum

    Skookum LawnSite Senior Member
    Messages: 675

    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!
  8. Randy Scott

    Randy Scott LawnSite Bronze Member
    Messages: 1,915

    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.:)
  9. Getmow

    Getmow LawnSite Senior Member
    from VA
    Messages: 445

    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.
  10. GeoffDiamond

    GeoffDiamond LawnSite Bronze Member
    from Maine
    Messages: 1,651

    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]

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