Legal Question in Business Law in New York

Re: is a cosigner at risk

The answer depends on what the individual co-signed for. Let's assume they co-signed for the loan. In that instance, they are liable to ensure the loan is repaid. That also means that if there is an accident and the truck is damaged they still have to pay off the loan. The co-signor should be named as an additional insured on any insurance policies to make sure that if the truck is damaged or destroyed, the insurance pays for the repair or pays the value of the vehicle if totaled.

Now, if you are asking about whether the co-signor can be sued by another involved in an accident, that depends on whether their name appears on the title for the truck. In NY, the owner of the vehicle, by statute, is liable for the negligent acts of the driver. So the co-signor could be liable for another's personal injuries if the title to the vehicle bears his name. You can verify this with DMV.

If the vehicle is only registered to the corporation, then the co-signor will not be liable for personal injuries unless he was the driver or otherwise personally involved in the accident.