Negligent Entrustment: When Letting the Wrong Driver Take a Van Makes the Company Liable

What negligent entrustment means

Negligent entrustment holds a vehicle owner responsible for its own decision to hand over the keys. The claim is not that the owner drove badly. It is that the owner let someone drive whom it knew, or should have known, was unfit to drive. A California appeals court, quoted in the notes to the state’s jury instruction, puts it this way: liability is imposed on the owner because of its own independent negligence, not the negligence of the driver.

California’s civil jury instruction, CACI No. 724 (the 2026 edition), lists what an injured person must prove:

1. The driver was negligent in operating the vehicle.
2. The defendant owned the vehicle, or had it with the owner’s permission.
3. The defendant knew, or should have known, that the driver was incompetent or unfit to drive.
4. The defendant permitted the driver to drive.
5. The driver’s incompetence or unfitness was a substantial factor in causing the harm.

The third element asks what you knew. The cases quoted in the instruction’s notes draw the line: the claim needs knowledge of facts showing or suggesting the driver’s incompetence, not merely a missing license. But a company that knows an employee has no license is on notice to ask about his competence. California’s Vehicle Code adds two duties of its own. An owner must make a reasonable effort to confirm a driver holds a valid license before letting him drive (14604). No one may employ or knowingly permit a driver who is not licensed for the class of vehicle (14606(a)).

Other states set their own elements through court decisions and jury instructions, so ask a local attorney how yours applies them.

Negligent entrustment, negligent hiring, and owner liability

An injured rider’s lawyer rarely brings one claim. Entrustment usually comes with two others.

Negligent hiring. A California court quoted in the CACI notes calls a claim that an employer negligently hired or kept a driver, and a claim that it negligently entrusted a vehicle to him, functionally identical in a typical case, because both rest on knowing, or having reason to know, that the person was unfit. For how careful hiring is judged, and Florida’s presumption for a clean pre-hire investigation, see NEMT liability.

Owner liability without fault. Some states make the owner answer for a permitted driver’s crash even when the owner did nothing wrong. California and Florida both do, but they cap that liability very differently, and neither state’s cap shields an owner’s own negligence:

Question	California	Florida
Owner liable for a permitted driver’s crash, without fault of its own?	Yes (Vehicle Code 17150)	Yes, under the dangerous instrumentality rule (jury instruction 401.14a)
Is that liability capped for a NEMT company?	Only when the driver is not acting as your employee or agent: $15,000 / $30,000 / $5,000 (17151)	No. The caps skip owners whose vehicles are used for commercial activity (324.021(9)(c))
The owner’s own negligence, such as entrustment	Not limited by the cap (CACI No. 720 notes)	Kept outside the caps by the statute itself (324.021(9)(b))

Florida’s instruction covers more than the owner. A lessee or a bailee who consents to another’s use of the vehicle is responsible for its operation too. Its notes add that proof of consent is not needed when an unattended vehicle is stolen because the owner left the keys in the ignition.

Negligent entrustment in a NEMT company

These are the moments when an owner hands over the keys:

• Hiring a driver with a bad record. A recent DUI, a suspended license, or a string of tickets shows up on a motor vehicle record, which also lists where each broker and state draws the line. Once that record is in your file, what it shows is something you knew. MTM Health’s standard agreement (the January 1, 2023 version Pennsylvania posts), for one, bars any driver with a suspended, expired, or revoked license (section 5.J).
• Letting a relative or an excluded driver take a van. In California, a named driver exclusion means the policy neither covers nor defends any use of a vehicle by that person, apart from a narrow defense duty for some household members, and the law says the exclusion reaches a negligent entrustment claim too (Insurance Code 11580.1(d)(1)). North Dakota’s insurance department confirms its law lets insurers exclude a driver. See excluded driver.
• Keeping a driver on after repeated crashes. Each crash in a driver’s file is a fact you knew, which is what the third element asks about. A broker limit shows where a careful company draws the line: MTM’s agreement bars a driver with two or more at-fault accidents causing injury or damage in 36 months (section 5.J).

A dispatch example

At 5:30 a.m., your dispatcher is short a driver for three dialysis runs. A driver hired four days ago is in the office. Her background check is done, but the driving record your broker requires has not come back. The dispatcher hands her the keys to a wheelchair van.

At 6:15, she runs a red light and hits a car. The record arrives that afternoon: her license was suspended in March after a DUI arrest, and the police find she was impaired again. Walk the five elements. She drove negligently. You own the van. You could have learned of the suspension by waiting for her driving record before she drove. Your dispatcher gave her the keys. Her impairment caused the crash.

If MTM Health sent the trip, it also breaks the broker contract. MTM’s agreement says no driver may perform trips until fully credentialed (section 5.D), and the annual credential file includes a three-year driving record (section 5.C). The fix is a rule the dispatcher cannot bend: no record on file, no keys.

How to defend against a negligent entrustment claim

A written standard you apply every time is the evidence that you used care. The federal motor carrier rules for drivers give you a ready model, even where they do not apply to your trips:

1. Pull the record before the first ride. The federal rule allows 30 days after hire to get a three-year record from every state that licensed the driver (49 CFR 391.23). A driver who takes a van before the record arrives is the dispatch example above.
2. Write down what disqualifies a driver. Use the strictest of your broker contracts and state rules. The driver background check guide and the motor vehicle record page list them.
3. Review every record at least once a year. 49 CFR 391.25 requires a yearly review that considers the driver’s accident record and gives great weight to speeding, reckless driving, and driving under the influence.
4. Record who reviewed it and when. The same rule puts a copy of the record and a note with the reviewer’s name and the date in the driver’s file, which is how you prove the review happened.
5. Act on what you learn. Pull a driver from the schedule the day a record crosses your line, and write down why.
6. Control the keys. Keep van keys locked up, never in an unattended van, and never in the hands of anyone off your approved driver list, including family.

These steps belong in your written fleet safety program.