5 Tips to Reduce Company Liability

On a bright morning just outside of Ann Arbor, Michigan, a semi truck hauling two trailers crashed into a motorcycle that was stopped for a red light.  The bike and its rider were driven into the back of a pickup truck before being pinned beneath the semi’s cab. Nearby emergency crews were able to lift the cab off the rider within 30 minutes of the crash.  He was still alive. He was rushed to a hospital in great pain but died within an hour.  At the scene, the truck driver admitted to police that he was sleep deprived.

The pregnant wife of the rider sued.  Defendants admitted liability for the negligence of the truck driver and sought to exclude all other evidence of fault.  The trial judge held that the defendant’s admission of liability did not preclude the plaintiff from advancing other negligence claims.  Michigan is one of several states that has adopted a rule that the defendant’s admission of liability does not prevent a plaintiff from suing under the doctrine of negligent entrustment, sometimes referred as vicarious liability.

Negligent Entrustment

The theory of negligent entrustment requires a plaintiff to prove the following things:

• the defendant driver was either incompetent, inexperienced  or reckless.
• the employer knew or should have known this about the driver.
• the employer entrusted their vehicle to the driver knowing about his history
• the driver was negligent.
• the driver’s negligence was the proximate cause of the crash, injury or death.

In this case plaintiff claimed driver was reckless for operating the semi-truck while being chronically sleep deprived.  She claimed the employer was aware of the driver’s condition and produced the truck driver’s pre-employment physical exam which revealed he was not getting “enough rest” and needed to increase his daily sleep time. Federal regulations prohibit a trucking company from allowing a driver to operate a commercial vehicle while the driver’s ability or alertness is impaired by fatigue, illness, or any other cause which would make it unsafe for the driver to operate the commercial vehicle.  In spite of its knowledge and the federal regulations, the  company  entrusted the driver with one of its trucks and assigned him to an overnight shift. The driver crashed into and killed the motorcycle rider.

The case settled for $10,700,000.00

The cost of developing and implementing a safety and risk program for a company are minimal when compared to the financial price that comes from a loss in court on a claim of negligent entrustment.

Actions You Can Take

So how can your company avoid this type of liability?

1.  Have hiring criteria:

• Drug screening – drug test all applicants;
• Past work records – investigate past work thoroughly;
• Talk to past employers;
• Request all driving records from a previous employer;
• Require a commercial driver’s license; and,
• Hire experienced drivers.

2.   Run a moving violations report that looks for:

• Violations within the past five years;
• Drag racing;
• Reckless driving;
• Driving under the influence (DUI or DWI);
• Refusal to take alcohol test;
• Open alcohol container;
• Using a motor vehicle in the commission of a felony;
• Leaving the scene of an accident; and,
• Speeding in excess of 25 mph over posted speed limit

3.   Set minimum Standards for hiring by requiring potential drivers to:

• Read and understand English;
• have the ability to safely operate a fleet vehicle;
• Be physically qualified;
• Have a valid DL or CDL;
• Provid a list of accidents and moving violations; and,
• comply with all  state or federal regulation

4.   After you hire:

• At least once a year, run a motor vehicle record check on all drivers. Review the results and establish a “risk scoring” system;
• Require all drivers to report any traffic infractions immediately;
• Have a system to ensure that information is retained and used in a yearly review.
• Establish and enforce a formal fleet safety policy specifically addressing distracted driving, speeding, drowsy/impaired driving, seat belt usage and more
• Communicate your safety policy to your drivers and have them acknowledge they understand and agree to adhere to it;

5.   Provide a comprehensive drivers’ training program:

• Closed course training –It is expensive and time-consuming but can benefit your fleet. This type of training teaches defensive driving and maneuvering. You can see, first-hand, how your drivers react and respond to many different situations; or,
• Driving simulators – Create life-like situations and conditions for your drivers but avoid expense and downtime associated with closed-course training;
• Defensive driving – Teach drivers different situations on the road and how to avoid negative outcomes;
• Nighttime driving – Drivers learn defensive nighttime driving; and
• DUI awareness – Educate drivers about substance abuse and the risks of driving after using alcohol or other drugs. This includes prescription medication.

For More Information

For more information on this and similar corporate traffic safety issues, check out our brochure on Vicarious Liability and our webpage on Corporate Traffic Safety.