Negligent entrustment: do you know the driving record of everyone in your organization that you allow to drive a company or personal vehicle on company business?

• Author: Moss, Al
• Position: Indiana: small: business reference: guide

The old adage that "what you don't know won't hurt you"doesn't apply here. What you don't know, but should have known, can and will hurt you. It could certainly jeopardize the financial stability of your firm.

Do you know the driving record of everyone in your organization that you allow to drive a company or personal vehicle on company business? Don't take this lightly as it affects your business insurance availability and cost.

Legally your organization is responsible to make significant efforts to insure that anyone authorized to use a vehicle on company business is qualified and safe.

If you entrust someone to drive for your business without ensuring that they are qualified and safe or if you allow someone to drive despite the individuals past driving history, you could be guilty of "negligent entrustment." Negligent Entrustment claims and judgments are becoming more common. In cases where gross negligence is involved, courts have awarded punitive damages, as punishment. Often insurance is barred from paying a punitive damage award.

To reduce your exposure to auto liability loss and Negligent Entrustment claims, consider the following:

* Driver selection is critical, starting with new potential hires.

* Annually check the driving records of all potential company drivers. This includes employees that use their personal vehicles on company business.

* Verify the insurance coverage and limits of drivers using personal vehicles on company business.

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* Have a formal, consistent driver safety policy.

* Formalize driver review and training.

* Enforce consistent disciplinary standards.

* Conduct post-accident reviews.

* Respond responsibly and consistently to driver developments.

* All fleet safety programs have similar basic components.

Most insurance companies have information and outlines for a sample fleet safety program. Certainly your insurance professional should be a resource and help.

Part of checking the driving record is a review of a driver's Motor Vehicle Record (MVR). You can bet that the plaintiff attorney in an...