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Business Liability From Auto Accident Suit

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markme7

Junior Member
What is the name of your state? Louisiana

A Current Scenario that prompted the Question Posed:

The spouse (wife) of one of the partners in our company (LLC) was involved in an auto accident that resulted in a "total" of the truck/property damage loss (tractor trailer truck valued at approx. $100,000+). The commercial trucking company that owned the truck was seeking to sue for damages/compensation for the loss. The police report rendering that due to wreckless driving, the driver (spouse of partner) was at fault. Her vehicle was also totaled in the accident. The auto insurance company (spouse/partner) agreed to replace the loss of the vehicle and only compensate for $25,000 of the value or total of the vehicle which could be used to settle part of the $100,00 claim on the tractor trailer truck.

The spouse/partner then proceeds to file for bankruptcy to protect their assets in the event the commercial trucking company begin their suit. However, this left a 10% ownership that the partner had in the company as a possible exposure for the suit as the result of this incident.

With this possible exposure, the company's largest share holder (90% partner) then assumed full share-holder status under an S-Corp to protect the company in the event of a suit. This organization will make the 10% partner, now an employee.


Here is the Question Posed:

The partner, who is now 100% shareholder/stock currently allows an ex-spouse (wife) to operate one of the vehicles in a private use manner under the Commercial Auto Policy that the company has. As an S-Corp now, Should a scenario like the one presented regarding the tractor trailer truck or should in the event there is a fatality, law suit or any possible suit for damages loss:

What is the liability on the company should an incident like the one mentioned previously occur with the (ex-spouse) using the company vehicle in private/personal manner have on the company?

What are the protections that the Commercial Auto Policy can give to the company should any possible claims, suits, or damages that may arise from such a scenario occur?

What if any are the coverages or insurance protections we need for employees who:
1. Transport supplies, equipment or materials for the company using their the company's vehicles?
2. Should their be more limits or coverages should a scenario like the one mention earlier resulting in law suit occur?
3. What are the liabilities to the company should an employee using company vehicles is involved in an incident like the one mentioned previously?

Thank you...
 
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