A few years ago there was a story involving a truck broker and their driver hit with a $5.2 million verdict in a negligent hiring case. Following a serious accident, the courts found that the carrier did not do a comprehensive job of investigating the driver, who had been under the influence of illegal drugs and fallen asleep at the wheel.
It can be surprising what winds up damaging a company. A driver who uses drugs and falls asleep while driving might, in another instance, have been held solely responsible for the accident, or the freight insurance provider might have covered the costs involved.
However, because the carrier did a poor job of vetting the driver, they wound up being hit with a $5.2 million charge of negligent hiring. In short, a comprehensive, responsible approach to managing your company is the best way to both prevent unfortunate accidents and to reduce legal exposure.
Contingent motor cargo insurance is there to ensure that reasonable risks are covered, but insurance is not a substitute for good hiring and safety practices. For some firms, specific options such as On-Hook Cargo Insurance address particular exposures and should be considered as part of an overall risk strategy.
Hiring best practices
- Run background checks
- Verify credentials
- Conduct your own testing and additional training
You need to have the utmost faith in your staff, not just your drivers, but everybody to whom you're signing a check. If something goes wrong and the incident leads to legal proceedings, you need to be able to prove that you have done everything that could reasonably be expected of you.
Investing in contingent cargo insurance means there is quite a bit riding on your shoulders; pair coverage with solid operational controls. If you operate in specialized leasing or rental arrangements, review options such as Lessor Contingent Liability Package and, for smaller operations, consider Small Fleet Contingent Liability Insurance to match your risk profile.
There is no reason to accept any driver without proper screening — there are more than enough qualified, competent professionals available to keep your business running smoothly. If you want to review coverage options or shop for a policy, you can talk to an agent about what fits your operation.
Frequently Asked Questions
What is negligent hiring?
Negligent hiring is a legal claim that an employer failed to reasonably screen or supervise an employee, and that failure contributed to harm or loss.
Will contingent cargo insurance automatically cover negligent hiring claims?
Not automatically; coverage depends on policy terms and whether the insurer finds the employer met its duty of care, so proper hiring and documentation remain essential.
What basic steps should I take when hiring drivers?
At minimum, run background checks, verify credentials, and provide testing and training to document that you exercised reasonable care.
How long should I keep hiring and training records?
Keep records for as long as reasonably necessary to demonstrate your hiring practices and training in case of a claim, typically several years depending on jurisdiction and company policy.