1. Negligent Entrustment
Negligent Entrustment is best defined as entrusting a vehicle to an individual without ensuring that the individual
has a valid driver’s license or allowing the person to drive a company vehicle despite the individual’s past driving
history. Employers can be held liable under tort law for negligent entrustment if an employee’s driving record was
known or would have been easily discoverable by that employer.
Plaintiff’s lawyers understand that negligent entrustment awards can be the real payday in an auto accident lawsuit.
Lawsuit settlements for property damage and bodily injury can be measured and contained by the real costs of the
repairs and medical bills. Negligent entrustment awards, however, are made based on the egregiousness of the
facts and the emotions of the jury.
Because commercial auto insurance policies often exclude coverage for damages awarded due to negligent
entrustment such claims can financially devastate a company.
It’s important that your business know which employees are driving a company car or their personal vehicle for
company business. Screen the driving records of all prospective employees and conduct an annual review of all
current employees who could put your company at risk.
Generally an employee with a DUI, suspended license or two moving violations within three years should not
be allowed to drive any vehicle for company business. When in doubt ask your commercial auto insurance
underwriter for guidance.
If you have additional questions contact Dan Bukaty at 913.345.0440 or e-mail dbukaty@bukaty.com.
Bukaty Companies
11221 Roe Ave., Ste. 200
Leawood, KS 66211
Phone: 913.345.0440
Toll-Free: 888.657.0440
Fax: 913.345.2608
www.bukaty.com
September 24, 2008
Keeping Your Business Informed and Prepared
Risk Management Bulletin
January 11, 2012