![]() ![]() ![]() Mack also recommended that the policy define the circumstances in which the employee would be required to pay for the cost of repairing or replacing the property, such as intentional misconduct or failing to return property at the end of employment.Ī policy on charging employees for damage to or destruction of company property must differentiate between exempt and nonexempt employees, said Greg Grisham, an attorney with Fisher Phillips in Memphis, Tenn.ĭeductions from an exempt employee's salary for damage to or destruction of employer's property would violate the Fair Labor Standards Act's salary-basis requirement, he said. The policy should provide notice to employees of any disciplinary action that could result from failing to safeguard company equipment. ![]() This is particularly important for electronic devices, such as cellphones, computers and tablets, that may contain confidential company information. Workers should be required to notify a company representative within a specified time in the event of any damage, theft or other loss of company property, Mack said. The policy also should require that employees maintain the equipment and use it only for its intended function in work-related activities, she added. If they do, you are legally obliged to comply with their request to hand over the item as part of the claim settlement process and terms of the insurance policy.When employees damage their employer's property-whether it's a laptop used while working from home during the pandemic or machinery in the employer's facility-how should the company respond? The answer depends partly on the company's policies about its property, as well as whether exempt or nonexempt employees damaged the property and whether the damage was caused by negligence or willfulness.Īs for former employees' damage to equipment or failure to return company property, employers will have to weigh the costs of litigation versus the likelihood of recouping expenses.Ī policy regarding company property should emphasize that any equipment provided to the employee remains the sole and exclusive property of the company, said Emily Mack, an attorney with Burr & Forman in Nashville, Tenn. Whilst an insurer retains a right to the salvage if they pay your claim, they wont always exercise it. If the company accepts your offer, you get to keep the item in addition to the claim payment. This means that if you want to retain the item, you can make a salvage offer to the insurance company. However, the insured party has first option on any salvage. If when settling the claim, an insurance company pays the value of a damaged item, they are within their rights to take possession of it. If the insurer considers the damaged item has any realizable value, it will consider the salvage potential. Salvage may be considered for any type of property (not just electronics). This is because even though the item pay be irreparably damaged, it still has a commercial value for parts. In terms of travel insurance, the most likely items an insurer may consider for salvage include electronic devices such as laptops, tablets, cameras and mobile phones. The second reason is that if the item is irreparably damaged and the value of the item paid to the claimant, the insurer may look to offset its loss by offering the item for sale. The first is that the insurer may wish to inspect the item to verify the damage and also to determine if it is repairable. It is usually a condition within the policy that the insurer retains the right to ask the claimant to send damaged items to it upon request. The proceeds from the sale of the damaged car are to the insurer’s benefit and offset the claim amount paid to the policyholder.Īlthough most common in motor vehicle insurance claims, salvage can occur in many other types of claims eg household contents, business stock / inventory, machinery, marine and even travel insurance. When a car is written off and the insurer pays the claim, it takes possession of the damaged car and sends it to an auction facility or similar. The practice of taking salvage for damaged items is most common in motor vehicle insurance claims. The insurer usually offers the damaged item for commercial sale to reduce its loss (ie the amount it paid to the claimant). Salvage simply means that once a claim for a damaged item has been paid, the insurer takes ownership of the item. Salvage is a basic principle of insurance. ![]()
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