Negligent Entrustment

Date: November 19, 2019

Nicholas Broughton, BITCO Legal Counsel

How employee auto accidents can jeopardize your company 

From truckers and EMTs to real estate agents and salespeople, company drivers are everywhere. As distracted driving increases, it is critical to keep these employees safe on the road.

Why does work-related vehicle safety matter?

  • Millions of workers use company vehicles.
  • Crashes are the leading cause of work-related deaths in the United States.

In addition to safety concerns, accidents by drivers on “work time,” are a big cost to employers. According to Centers for Disease Control and Prevention, motor vehicle crashes at work cost U.S. employers $25 billion annually. That’s an average of $65,000 per nonfatal injury and nearly $671,000 per accident-related death.

Commercial vehicle insurance covers most work-related accident settlements. But some circumstances, like negligent entrustment, may not be fully covered. If your company is held liable for negligent entrustment, the costs can add up quickly and cause major financial issues.

What is negligent entrustment?

An employer who allows an employee to operate a dangerous instrument (usually a vehicle) can be found liable for negligent entrustment if:

  • A driver causes physical property damage or bodily injury to himself/herself or a third party, and
  • The employer knew, or should have known, that the driver was unqualified (based on safety record, certifications or sobriety) or the vehicle was unsafe.

How to protect your business

Your business is only as safe as its drivers. To avoid the steep costs associated with negligent entrustment:

  • Check the driving record of every prospective employee as part of your hiring process.
  • Complete this check again before placing anyone behind the wheel.
  • Conduct an annual review of each driver's motor vehicle record.
  • Provide comprehensive training sessions.
  • For specialty vehicles and equipment, make sure the employee has the required certification(s).
  • Regularly enforce drug and alcohol policies.
  • Conduct routine safety inspections of all vehicles and dangerous equipment.

In addition, failure to comply with federal driver safety regulations can be a contributing factor in finding an employer liable for negligent entrustment.

Consult with your BITCO agent for more information about negligent entrustment. Together, let’s protect you, your employees and your valuable company assets. Doing so is one of the best decisions you can make.

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For information purposes only. BITCO's blog content does not address all potential circumstances and is not a substitute for business, safety, or legal consultation.

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