Streetsmart insurance Blog
The employer of a worker who causes damage during their off hours on a business trip may be held liable for them acting "in the scope of their employment," according to a federal court decision.
The ruling will allow the case to go forward after the court declined to uphold the employer's motion to dismiss it as a defendant in the lawsuit after its employee had caused $147,000 in damage to a hotel room while on a business trip. The employee fell asleep while frying egg rolls on the stovetop in his room, after which a fire broke out.
The case illustrates the importance of having policies in place for traveling workers in order to reduce your company's liability when they are on a trip on your behalf.
Lloyd's of London paid for the original damage but later sued the worker and his employer, FlightSafety International Inc., to collect the damages. Lloyd's says that by virtue of the fact that he was on a business trip, the man was acting within the scope of his employment when he started the fire.
Hence, FlightSafety is also liable for the damages to the Residence Inn in Wichita, Kansas.
In making its case, Lloyd's said that FlightSafety had a contract for its employees to stay with the hotel chain. "The entire purpose of defendant Foster's trip was business on behalf of defendant FlightSafety," Lloyd's wrote in its complaint.
The court said that it was not yet clear if the worker was acting outside the scope of his employment and that that fact needs to be tried at the trial court level.
The decision sends the case back to the trial court for hearing.
It's quite common for employees to engage in risky behavior when on business trips. On Call International in a 2015 survey of 1,000 business travelers found that:
With these findings in mind and in light of this decision, employers should keep in mind that other courts have also found them liable when their workers are driving during their off hours while on a business trip, say going out to dinner on their own.
While responsibility ultimately falls on the business traveler to act in a responsible and safe manner, employers should establish appropriate parameters and rules and be clear about the expectations it has of its employees while they are out representing the organization.