Auto Insurance Claims: who is liable?, astro van, bloody nose

Question
This is kind of complicated... but hopefully i will explain it right.  
I own a small 1991 astro van that i use for my business when I need to move something. One of my employees asked to use it to haul something and I said ok.
The employee took the van and hooked a non running car up to it.  He let his brother drive my van and the employee was in the non running car that was being towed.  they proceeded to drive down the interstate at nite!  (I did not give permission to the employees brother to drive my van) I had no idea that they would do something so stupid and certainly would not have allowed them to do this.
ok, so they are driving down the interstate, (im guessing the towed vehicle had no tail lights) and a woman rear ends the towed vehicle which caused the towed vehicle belonging to my employee to rear end my van driven by his brother who I did not authorize to drive the van.
the van flips and the brother gets hurt {so he says} and the towed vehicle gets totaled.  The womans car also gets totaled but she did not go to hospital as far as I know.  
Today the employee gives me a letter from the womans insurance company.  It is addressed to the employee and it is requesting insurance information from him.  He in turn gives it to me and wants me to put my insurance information on the form.  my questions are;
Isnt the towed vehicle and the employee responsible for the accident?  
The brother driving my van without my permission is now trying to sue whoever he can for his bloody nose "head injuries" who is responsible?  The employee or me?  
Should I make a police report stating that I did not authorize the brother to drive the car?
Should I fill the paperwork out?
Should I contact the Lady or her insurance,who was driving the car?
What I am concerned about is my insurance premium going up and the chance that I may be sued.  My husband and I have perfect driving records and low rates. I am afraid they will increase.
Help me. I really dont know what to do and what my liablity is.

Answer
Hi Suzanne,

Wow!! This is a difficult situation but I'll do my best.

Generally, insurance follows the vehicle not the person. So I would think that your insurance will come into play here. When you gave the employee permission to use the vehicle, he can do with it as he pleases. Unless you are willing to prosecute the friend for stealing the van.

Due to the fact that there are multiple vehicles and people involved in this, I think it would be best for you to contact your insurance company and file a claim. They will take a statement from you, your employee and the friend and will assist in the determination of fault. Your insurance company will also provide you with defence counsel in the event you are sued. You need to just be up front with everything that happened.  This may cause your rates to go up if your employee or the friend is found to be at fault, but there is not much that can be done about that now.

I hope this helps
Richard Hixenbaugh