# Company Car Misfuelling in New Zealand: Who Is Liable?

> Who pays when an employee misfuels a company car? The answer depends on your employment agreement, vehicle policy, and insurance. We explain the New Zealand framework.

- Canonical URL: https://www.eek.nz/news/company-car-misfuel-liability-nz
- Published: 2025-03-25
- Author: EEK Mechanical
- Publisher: EEK Mechanical, a trade name of Forman Pacific, LLC

## The Employment Agreement Question

New Zealand employment law does not specifically address misfuelling, but the general principle is clear: where an employee causes damage through negligence or carelessness, the employer may seek to recover costs. Whether this is practical — and whether it is appropriate — depends heavily on the specific employment agreement, the workplace vehicle policy, and whether misfuelling was a single incident or a pattern of careless behaviour.

## Vehicle Policy Is the Key Document

Employers with clear vehicle policies — stating the fuel type for each vehicle, requiring drivers to check before fuelling, and specifying consequences for damage caused by driver error — are in a stronger position to recover costs. Employers without a written vehicle policy, or who have never briefed drivers on fuel type requirements, will find it difficult to enforce cost recovery.

## Insurance Typically Sits with the Employer

Fleet insurance policies generally treat misfuelling as a single incident covered under the policy (subject to excess). Employers rarely recover the excess from employees for a first incident. Repeated incidents, or incidents where the driver ignored clear labelling, may be treated differently. Consult your employment lawyer before attempting cost recovery from an employee.

## The Practical Recommendation

Invest in a clear vehicle policy, brief every driver at onboarding, and label every vehicle with its fuel type. The cost of prevention is a fraction of the cost of recovery, liability disputes, and staff relations damage that follows a misfuel incident.

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Source: https://www.eek.nz/news/company-car-misfuel-liability-nz