Posted by Keith Jones on Nov 7th, 2017 3:34pm
One of the most difficult conversations we as agents can have with our clients involves "removing someone" from their (the clients) drivers list. We have all updated the drivers list at renewal, forwarded to the carrier and had the carrier advise John Doe is ineligible (does not meet the carrier's guidelines).
Sometimes it involves a "key employee" or a relative. Infrequently, even the owner him/herself.
The client will always argue that the incident/infraction did not involve driving a company vehicle or was not during operation of a vehicle on company business. Even if the occurrence was on personal time and/or in the employee's personal vehicle, there are still some serious implications to the business ... thanks to a legal doctrine known as Negligent Entrustment.
Negligent Entrustment occurs when one party allows another to engage in an activity, like driving a car, when the first party knows or should have known (emphasis mine) that the second party lacks the knowledge or experience to safely do so, creating a risk of harm to others (this is a generic definition – the actual definition varies from state to state). This doctrine is most often applied to commercial auto claims ... but it can apply to operation of heavy equipment and/or operation of potentially dangerous tools as well.
The principle of negligent entrustment is not founded upon negligence of the driver of the automobile. Its focus is on the negligence of the entruster (first party – the employer) in supplying an automobile to an "incompetent driver." The employer knew or should have known of the employee's incompetence ... and in spite of this knowledge or failure to even know ... entrusted the vehicle to the employee/driver.
The mere occurrence of an auto claim can be costly enough. Allegation(s) of negligent entrustment in a claim against an insured's employee driver can inflate the claim into a huge award/settlement.
Driver Selection and Monitoring is ... wait for it ... HUGE!
Here's a quick overview of the components of a Safety Program for Commercial Automobile (yes ... I know you know ... AND you can obtain from any of your carriers!):
Written Policy - develop and implement a formal policy that includes minimum driver qualification standards and disciplinary guidelines.
Job Application - applicants should be asked to list all driving violations or accidents and sign an authorization allowing the employer to obtain and review the applicant's MVR.
Proof of License - before a person is allowed to drive a vehicle for company purposes, obtain, inspect and photocopy/file proof of a valid license.
Incident Reporting – all drivers must be required to report any motor vehicle violations or accidents in which they are involved as soon as practical. This includes incidents involving personal vehicles.
Motor Vehicle Reports – should be reviewed for all drivers at least once a year. The review should include employees authorized to use a personal vehicle for business purposes (outside sales personnel for example) as well as non-employees authorized to drive a company vehicle (employee spouse, etc.).
Criminal Background Checks – should be performed ... with attention paid to histories of drug/alcohol-related crimes.
These are just a few of the topics ... again, Premier Insurance Corporation, Inc. can check with our carriers and obtain and assist our clients in implementing policy/actions acceptable to the carrier.