Negligent Entrustment leads to negative consequences

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Negligent Entrustment leads to negative consequences

Negligent Entrustment arises when one party (the entrustor) is held liable for negligence because he provided another party (the entrustee) with a dangerous instrument, and the entrusted party caused injury to himself or a third party, or damaged property, with that instrument.

Your company can become at risk of negligent entrustment by allowing an employee to use a vehicle on company business when you know or should know that the driver intends or is likely to drive the vehicle in such a manner as to create an unreasonable risk of harm. This exposure is not limited the use of autos owned by your company.  It exists when you allow employees to drive their own vehicles on company business as well.

If the words negligent entrustment are used with an insurance claim, then your company is one minute from normal. There will be a significant disruption to your business, whether you are covered or not.

With general liability coverage there is a specific exclusion for “bodily Injury or property damage arising out of the ownership or entrustment to others of any aircraft, auto or watercraft owned or operated or rented or loaned to any insured.”  No matter how much GL coverage you carry, there will be no coverage for a Negligent Entrustment incident.

KMRD Partners provides risk management consulting and property & casualty insurance to protect against potentially catastrophic losses that wait on the other side of one minute from normal.  We are dedicated to anticipating risk, and helping firms to recover from unplanned events.

Contact us at before one minute from normal strikes your company, and we will identify and correct coverage and service gaps.


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