Negligent entrustment: liability for putting an unfit driver behind the wheel

What the claim requires

A negligent entrustment claim says the company was careless in handing over the keys, one of the routes to company liability covered in the NEMT liability guide. Each state words the test its own way. California’s jury instruction (CACI No. 724, 2026 edition) lists five things the injured person must prove:

1. Careless driving. The person behind the wheel drove negligently.
2. Control of the van. The company owned it, or held it with the owner’s consent.
3. Knowledge. The company knew, or should have known, that this person was not competent or fit to drive.
4. Permission. The company allowed that person to drive.
5. Cause. That unfitness played a substantial part in causing the injury.

Texas uses a similar five-part test, and the driver insurance approval guide explains how a carrier’s written decline can become proof of what the company knew.

The knowledge element has its own case law. California courts have held that the claim needs actual knowledge of facts that point to the driver’s incompetence, and that a missing license alone is not the test. Knowing a driver has no license does put an employer on inquiry, though, and a jury then decides whether letting that person drive was careless.

How it differs from vicarious liability and negligent hiring

Vicarious liability makes a company answer for an employee’s careless driving on the job, whether or not the company did anything wrong itself. Negligent entrustment is different in kind: California’s courts describe it as liability for the owner’s own independent negligence, not the driver’s.

Negligent hiring and retention sit right next to it. A California appeals court said in McKenna v. Beesley (2021) that in a typical case the hiring claim and the entrustment claim are functionally identical, because both rest on the company’s awareness that the person was unfit to drive. Entrustment reaches further in one way: it applies even when the driver was never on the payroll.

Why lawyers plead it after a van crash

Entrustment and hiring claims open the door to the driver’s history. In Diaz v. Carcamo, the trial court let jurors hear that the truck driver had two earlier accidents, one only 16 days before the crash, had lied on his job application, and had left three of his last four driving jobs after being fired or quitting without good reason. The jury then put 35 percent of the fault on the employer itself, plus the 20 percent it gave the driver, whose share the employer already had to pay.

The Supreme Court of California reversed and ordered a new trial in 2011. Once an employer admits it is vicariously liable for its employee’s driving, the court held, an entrustment or hiring claim is superfluous, and the employer pays only the employee’s share. The court called that the majority view nationally and cited decisions from Missouri, Georgia, Illinois, and Texas that follow it. The exception it noted is negligence that is truly separate from the driver’s, such as handing the driver a defective vehicle. Texas has also held that punitive damages are possible against an owner who was grossly negligent in entrusting a vehicle to a driver it knew, or should have known, was incompetent or habitually reckless (Schneider v. Esperanza Transmission Co., 1987).

Whether your insurer pays a punitive award depends on your state, which NEMT insurance exclusions covers. A driver your insurer has excluded by name is a separate problem, explained in the named driver exclusion entry.

The records that defend it

The defense is proof that the company checked, and kept checking. Federal motor carrier rules make a good yardstick. Under the federal definition of a commercial motor vehicle (49 CFR 390.5T, the version now in force), they bind only interstate vehicles with a weight rating of at least 10,001 pounds, or that are built or used to move 9 or more people for compensation, driver included. Even for a fleet outside those rules, the same steps make a file that shows the company kept checking:

• At hire. Three years of driving history, requested from every licensing agency that issued the driver a license in that span, within 30 days of the start date (49 CFR 391.23).
• Every 12 months. A fresh record and a review of it, with special weight on impaired driving, reckless driving, and speeding (49 CFR 391.25).
• Before the first trip. A road test given by someone competent to judge the driver (49 CFR 391.31).

Keep the decisions as well as the documents: why a driver with a ticket was kept, and what changed after a crash. The driver file checklist lists what each file holds, and the background check guide covers what each check turns up.

HealthRide’s fleet registry keeps each driver’s license and other credentials with their expiration dates, reminds you before they lapse, and flags an expired credential when someone tries to assign that driver a trip.