Bad employee driver and negligent entrustment

Negligent Entrustment


Automobile accidents can be an expensive liability for companies that rely on the use of vehicles for their business. That risk has increased in recent years, mainly due to distracted driving and a legal concept called negligent entrustment.


Negligent entrustment occurs when an employer is held liable for negligence in choosing an employee to operate a dangerous instrument, usually a vehicle.


An employer can be found negligent if both of the following situations occur:

  • A driver becomes injured while driving for company business, causes injury to a third party or damages physical property.
  • The employer knew, or should have known, not to trust the vehicle to the driver or that the vehicle was unsafe.


If a driver is working within the scope of his or her job duties and has permission to use a company vehicle, it is presumed that the employer has trusted the driver with the vehicle. The following can be used to prove a finding of negligence:

  • An investigation of the accident scene
  • Interviews with the drivers and witnesses
  • Other applicable evidence that includes citations issued to the drivers


Companies must be able to show that they took all possible precautions to prevent accidents. If not, the actions they did or did not take might be construed as negligent entrustment.


Liability Coverage is Not Sufficient

General liability policies do not offer coverage for incidents of negligent entrustment. Although business auto policies do not exclude negligent entrustment, coverage may not be sufficient if an employee is involved in a harmful accident. Juries often award the plaintiff punitive damages in excess of any compensatory damages resulting from negligent entrustment.  These punitive damages are not covered by insurance policies putting the company’s assets at danger.


How to Avoid Negligent Entrustment

Reduce exposure to negligent entrustment lawsuits by adhering to the following best practices:

  • Prescreen all individuals granted permission to drive for company business. Review their driving records annually.
  • Provide regularly scheduled driver reviews and comprehensive training sessions.
  • Maintain company vehicles to ensure that they meet strict safety standards.
  • Provide post-accident reviews and training on how the accident could have been avoided.
  • Put clear safety policies in writing to minimize risks. Follow all OSHA guidelines as well as guidelines specific to your business.
  • Define your permission policy. Anyone with permission to drive a vehicle for company business is classified as an insured on a company policy. That is why it is important to define your permission policy in a way that ensures flexibility but isn’t too broad.
  • Regularly enforce drug and alcohol policies.
  • Enforce a zero tolerance policy for driver misconduct.


The best accident is one that never happened.  Set guidelines in which no driver can exceed and prevent bad drivers from driving your vehicles.  Your business can not afford the consequences of  negligent entrustment.


If you need help putting together an driver matrix that is fair, objective and consistent with your team, email me.  I have plans, procedures and acceptability matrices to help you implement your driving program.


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