Merriam-Webster defines negligent entrustment as “the entrusting of a dangerous article (such as a motor vehicle) to one who is reckless or incompetent to use it safely”. As a business owner you have a responsibility to ensure that any employee driving a company-owned vehicle OR their personal vehicle (or any vehicle for that matter) on company business is experienced and competent.
A person can be deemed incompetent if they do not have a license in good standing, do not have an appropriate license for the vehicle being operated (CDL), or a record that has several at-fault violations such as DUI, reckless driving or numerous accidents or moving violations in the previous few years. Since these items are easily discovered through a minimal amount of due diligence (pull the motor vehicle record), negligent entrustment is becoming a more litigious commonality.
What does this all mean?
Here’s an example: Employee A has been a great worker for 15 years. He/She is now going through a tough divorce and has fallen on hard times. He/She recently got a DUI, a reckless driving citation and been involved in an at fault crash. The employee just recently had their license reinstated so you allow them to use a company vehicle. He/She gets into another accident and injures a third party. The third party not only collects from the auto insurance policy but sues the business for negligent entrustment triggering the general liability policy as well.
There are several easy ways we can help reduce your business’ exposure to negligent entrustment.
Give us a call to learn more.