Negligent Entrustment: Never Worth the Risk
In fleet management, “negligent entrustment” means allowing a vehicle to be driven by someone who is deemed unfit to operate it, putting others at risk. When you allow an employee to drive a company vehicle, whether you have knowledge that they are unqualified or incompetent to drive safely or have not confirmed their driver qualifications through an MVR, that can lead to legal liability for your company if your employee causes an accident due to their driving negligence.
A few months ago, this very situation played out in Florida: a Nassau County jury awarded $141.5 million to people injured by a logging truck driver whose employer later described him as “unfit to operate” the tractor-trailer.
Fit for Failure
This “unfit” driver had a driving record that included charges of DUI, possession of methamphetamine, careless driving, speeding in a commercial vehicle and causing a crash. Yet, his employer hadn’t checked his driving or arrest history before putting him on the road and entrusting a 60,000-pound logging truck to his care. Additionally, the fleet manager was unaware that logging vehicles are subject to extensive Federal Motor Carrier Safety Regulations and had never read them.
The driver was cited for failing to maintain a safe distance and careless driving for barreling (at an estimated 67 mph) into the back of a two-door Toyota in stopped traffic, starting a five-vehicle pile-up. Injuries to several drivers included head, neck, back, leg and shoulder trauma, while a 5-year-old in a booster seat suffered a traumatic brain injury and other head, neck and spine injuries.
Did the Punishment Fit the Crime?
The jury award included $125 million in punitive damages for the lawsuit against the driver, his employer and the truck’s owner. This nuclear verdict sent a clear message that the jury felt the company should be made an example of for being grossly negligent in its hiring, training, supervision, employment and entrustment of the employee as a truck driver.
MVRs Can Decelerate Risk
The lesson learned from this case is simple: Obtain the driving records of each driver before hiring, so you hire qualified drivers. Understand that if you ask for an exception on a driver who is below the industry standard, then you may be assuming the risk of negligent entrustment; this means you would have to hire your own counsel to defend this portion of the law suit, and you may be subject to punitive damages that can be three to 10 times the injury award AND WILL NOT BE COVERED BY INSURANCE.
Play it Safe
A little investigation goes a long way…. educate your fleet managers to abide by your company’s hiring criteria and stand by your policies and procedures. Establish a culture of driver safety by conducting regular training and periodic MVR reviews to ensure no new driving infractions have occurred. Be sure to maintain documentation in driver files so you can show your due diligence. If accidents or unsafe driving behaviors occur, address them with specialty training and driver incentives that reward good driving practices. You’ll be glad you did.
Source: Jacksonville Florida Times-Union
Terri Moran
Insurance industry veteran Terri Moran leads the underwriting and operational strategies for the MOVER’S CHOICE program. Throughout her career, Terri has held roles in leadership, underwriting and marketing with national insurers. A staunch industry advocate, she has served as a member of the WSIA Internship Committee, working to attract young professionals to career opportunities.
In her spare time, in addition to enjoying her family, she is a Member and past Chair of the Board of Directors for the Surplus Lines Association of California.