Safety Advisor: Closing the Doors on Negligent Entrustment

When a driver is assigned to deliver your goods or services, you have a duty to assign someone who is competent. The driver must safely represent your company. If a marginal driver is selected, your business could be held liable in a negligent entrustment lawsuit.

One of the ways your company can be held liable for negligent entrustment is to assign duties to someone without exercising proper care. For example, your company assigns a driver with a history of speeding tickets to deliver parts. This driver, while traveling in excess of the speed limit, hits another vehicle injuring its occupants. Not only could your company be held liable for the occupant’s injuries and the vehicle, you could be held liable for punitive damages under negligent entrustment laws for not exercising proper care.

Punitive damages are awarded to punish the employer for wrong doing. Not providing an atmosphere or conditions for the safety of others would be considered a “wrong doing”. In some states, the court will not let insurance companies pay for punitive damages. Settlements for over $1 million for punitive damages are not unheard of. Procedures should be developed to help close the door on negligent entrustment.

Driver Selection

One of the biggest concerns with negligent entrustment claims is in driver selection. If a driver is selected who lacks skill in the job or lacks physical, mental or emotional qualifications, your company could be held liable for their actions. This includes selecting a driver with a poor driving record. To reduce this exposure, develop a driver selection procedure which includes the following.

  • Review motor vehicle records of drivers before hiring, and then annually thereafter. Eliminate repeat offenders from driving company vehicles. Make it a policy that your drivers must immediately inform your company if their license has been revoked.
  • All drivers should be examined by a qualified physician to make certain the driver applicants do not have any physical or mental conditions which may affect their driving. (Depending on your state laws, this may only be done after the driver is hired for the job – check with your lawyer).
  • Make sure the driver can legally drive the vehicle. Most states regulate drivers who operate vehicles with a Gross Vehicle Weight Rating (GVWR) of over 10,000 lbs. Commercial Drivers Licenses (CDLs) are required on vehicles with a GVWR of over 26,001 lbs. Keep a photocopy of all drivers’ licenses. Make sure the license has not expired.
  • Inexperienced drivers should be avoided. It is against child labor laws to allow children under the age of 18 to drive more than occasionally, and it must be incidental to their employment.

Note: When hiring CDL drivers, consider using the Federal Motor Carrier Safety Administration (FMCSA) Pre-Employment Screening Program. This will give you information on an applicant’s past safety performance and crash history. Although this information is far more comprehensive than a Motor Vehicle Record (MVR), it should be considered a supplement to, not a replacement for, the MVR. For more details, go to www.psp.fmcsa.dot.gov.

Vehicle Condition

Vehicle condition is also an important factor in eliminating negligent entrustment exposures. Follow manufacturers’ recommended guidelines for vehicle maintenance. It is important to keep vehicle maintenance files on each vehicle. A daily inspection should be performed, with a weekly documented inspection on file. Vehicle inspection checklists are available from Sentry Insurance to help document this information.

Avoiding Negligent Entrustment

The possibility of a negligent entrustment lawsuit can be reduced by selecting good drivers and maintaining safe vehicles. The single most important way to prevent claims from happening is to prevent accidents from occurring in the first place. Educate your drivers on safe driving techniques. Make sure you document all policies and procedures, and keep driver qualification files, vehicle maintenance files and any driver training up to date. These documents can be critical in the final outcome of a lawsuit.

Sentry Insurance is committed to helping you protect your business by providing resources to manage loss-producing situations and prevent accidents. For additional information visit ForTruckersOnly.com, or call 1-877-832-1835.

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