Protect Against Negligent Entrustment for Fleets | Fleet Liability FAQs

Of all the issues on the plate of a fleet manager, negligent entrustment for fleets should rank among the most important. It’s an area that holds high risk for fleets, but often does not get the attention that it deserves.

Better risk management in the area of negligent entrustment can protect a fleet from liabilities caused by the actions of employees. Fleet managers can help mitigate negligent entrustment by understanding the issue and taking steps, including creation of a formal fleet safety policy and regular training on various safe driving topics.

What Is Negligent Entrustment for Fleets?

In fleet management, negligent entrustment refers to a situation in which a company entrusts an employee with a potentially dangerous device (such as a company-owned vehicle) and the entrusted party negligently causes injury, suffering, unfair loss, or harm to another person. Tort law is the body of law that deals with this type of wrongdoing. Under tort law, a court may hold a fleet company liable for this negligence.

Negligent Entrustment is part of tort law, which refers to law that addresses a “civil wrong.” Tort law is designed to give those injured through the acts of others a way to seek damages and remedies through the court system.

The most common tort is negligence. It has particular importance to fleets because they do business using a machine that is inherently dangerous – a motor vehicle. Juries often award large verdicts in these cases, including so-called “nuclear verdicts” that exceed $10 million.

Tort Law and the Commercial Transport Industry

Generally speaking, when it comes to negligent entrustment for fleets, a court must find that the driver and the company exhibited behavior that does not meet fleet industry standards.

For example, if a driver is involved in a crash, the other party may claim the driver exhibited incompetence and that the fleet company was negligent in hiring the driver. The court might look into whether the fleet met standards in areas such as checking a driver’s motor vehicle records or had reasonable safety programs. They may also check to ensure the company has current and appropriate driver policies and procedures similar to other fleets.

A court may hold a fleet liable for negligence directly through negligent hiring, negligent supervision, negligent training or negligent retention.

Addressing Negligent Entrustment for Fleets

Tort law bases the concept of negligence on the idea of “duty of care.” This means that a person engaging in an activity – in this case, a driver – should do so in an ordinary, prudent, reasonable way. This is why driver training and technology that can improve driver performance is so important in the industry.

As noted by Automotive Fleet, defending against negligent entrustment often comes down to having a process in place and demonstrating that it is enforced. Some of the proactive ways a fleet can address negligent entrustment include:

  • Mandatory MVR checks for all employees (technology makes it possible for this to be done automatically and continuously)
  • Mandatory background checks
  • Driver training that includes operation of the vehicle and use of in-cab equipment
  • Putting a formal fleet policy in place and communicating it with all drivers (including a safety policy)
  • A formal, documented hiring process that clear establishes standards for drivers
  • Mandatory vehicle inspections and monitoring using connected devices

These steps can help better manage the risk of negligent entrustment for fleets. While no plan is foolproof, fleet managers can lower the chance of big verdicts by taking the proper steps in hiring, training and monitoring drivers in their employ.

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