Negligent Lending of a Vehicle

April 13, 2006

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In negligent lending cases, you are liable because you let an employee use a company vehicle when you knew (or should have known) the employee was unfit to drive. To reduce your liability from negligent lending suits against you, you can:

Obtain adequate insurance on all of your vehicles. Ask your insurance agent about any vehicle safety programs he or she can recommend.
Be sure that any employees who use your vehicles have all licenses and permits required to operate the vehicles that they use. You should keep this documentation on file, but in a file that is separate from other personnel records. (Some government agencies, such as the Equal Employment Opportunity Commission, may take a dim view of employers who keep photocopies of picture ID's like driver's licenses in personnel files. This is because they can be used to identify a person's race, sex, and age and, theoretically at least, facilitate unlawful discrimination.)
Draft and enforce vehicle policies that alert you when an employee is not fit to drive. However, be careful about having employees tell you about such things unless you are prepared to have someone drive in their place. The worst thing you can do is let an employee take the wheel after that employee has specifically told you that he or she unfit to drive.