Auto Insurance Claims: Who pays for the damage?, financial responsibility law in Indiana

Question
My husband owns a small remodeling business and one of his employees was towing a trailer when one of the wheels came off and hit the car behind him.  When the cops came they ran the employees drivers license and it was suspended and when my husband call our insurance company they said that he never returned some paper they sent him and they canceled his policy so we were not insured on top of all of that.  In the state of Indiana, if you don't have insurance you can loose your license for up to a year so would that fall back on my husband since it was a company truck and second question, is this something that we now are liable for since it did cause damage on the other vehicle? Since we didn't have insurance wouldn't we be better off just paying out of pocket then if the other vehicle filed a claim with her insurance or is this a "no fault" insurance claim?

Answer
Insurance follows the vehicle, and a trailer is part of the vehicle.  So in Indiana, tort law governs, this means that whoever is negligent is the responsible party.  Negligence in your case seems to be with the owner of the vehicle.  If the employee was in the scope of his employment with the remodeling business, and the employee's license was suspended, then it is a case of both "vicarious liability" and "negligent entrustment".  This is not a no-fault accident.  Maintenance of the trailer would be the responsibility of both the operator and the owner of the vehicle towing the trailer.  In this case, I would suggest you contact the damaged party, find out if they filed a claim with their own carrier, and then negotiate a payment plan with the insurance company for the victim or with the victim directly in order to avoid suspension of the driving privileges or registration privileges of your company / husband.

I hope this helps!