Insurance issues

As part of our never-ending search for truth, justice and the well- being of pizzeria owners, I feel compelled to discuss a really sticky issue with you.

For the purpose of this discussion, I’m going to make a few assumptions (go with me on this…)

  1. You actually buy delivery liability insurance.
  2. You buy ‘iceberg size” chunks of it.

If you don’t, stop NOW and go do it!

With that out of the way, I am going to give you a peek into my business world.  Look, part of what I do is sell insurance. But another part is to tell people how to deal with things when insurance isn’t available or doesn’t make sense to buy. This part is usually referred to as “risk management.” I spend time, money and resources in gathering important information and doing my best to make sure pizzeria owners get it.  Now, it’s under that heading that I bring this IMPORTANT information to you.  Let’s take a look at something that I think should make the hairs on the back of your neck stand up in a shiver.

Negligent Entrustment

There’s a nasty little doctrine out there that can make you responsible for a whole separate cause of action if your driver has an accident. Forget about the regular damages that are claimed in an auto accident – this is separate, distinct and may well involve claim for punitive damages. And it ‘AIN’T’ covered by auto insurance.  In fact, it may not be covered by ANY insurance. In my research, I’ve been seeing that claims on this are being denied and wind up in court just to see if the insurance policy will pay!

Here’s the deal. When you “entrust” someone with the means to do something for you, you have an obligation to see to it that that person is reasonably fit for the job. For example – you can’t give a chain saw to a blind man and hire him to do some “light pruning” next to your neighbor’s prize rose garden. You’d be held responsible for the catastrophe that follows. Following that line of thought, when you “entrust” someone with the task of delivering for you, you take on an obligation to see to it that they are reasonably fit for the job.  In the case of delivering pizza, that would surely mean at least verifying that they have a license at the time of hire and that they maintain that license during the course of delivery work for you.

The Dilemma…

Question: Once they are on the job, how often do you monitor their licenses? Answer: Oh, you don’t? Drivers come and go. There are a million other things on your agenda and you just have to get that food out the door. Too often driver monitoring gets pushed aside or forgotten. Here’s some bone-chilling information on why you just can’t let that happen.   

“You are only as good as your worst driver…If your worst driver is involved in your worst accident, and they are not defendable – you are in trouble.”  B. Prestor, Aon International.

6,484 people in New York City have had their license suspended for the 20th time or more. *

In Southern California, which leads the U.S. in hit-and-run cases, police believe many of the people who flee the scene do so because they are driving without a license. *

More than 36,000 Texas drivers involved in accidents last year (1993) had no license. *

* These statistics were published in the June 13, 1994 issue of Time in an article “Unlicensed to Kill.”

Findings from the current study** indicate that:

Of the 278,078 drivers involved in fatal crashes in the United States between 1993 and 1997, 3.7 percent were unlicensed, 7.4 percent were driving on an invalid (e.g., suspended, revoked, etc.) license, and 2.7 percent were of unknown license stabs.

Twenty percent of all fatal crashes in the United States—one fatal crash in five— involves at least one driver who is unlicensed, driving on an invalid license or of unknown license status.

Between 1993 and 1997, some 42,049 people were killed in crashes involving at least one driver who was unlicensed, driving on an invalid license, or of un-known license status.

**Source: AAA Foundation For Traffic Safety. Founded in 1947, the AAA Foundation is a not-for-profit, publicly supported charitable research and educational organization dedicated to saving lives and reducing injuries by preventing traffic crashes.

If there is a serious accident, your single biggest worry will be the lawyer the injured party hires to go after you. You see, in our system, the lawyer actually becomes an investor. They will invest time and money (for research, investigators, depositions etc.) in speculation on the return they will make from a judgment. The plaintiffs lawyer MUST get the judgment up as high as possible in order to recoup the investment and make a profit based on the judgment handed down.

Two Examples

Example #1:
Source: Searched for Negligent Entrustment.  490 returned results.

Example #2:
A $315,000.00 settlement on the eve of trial by Hyde Oldsmobile Inc.

Attorneys: Plaintiff was represented by GTLA member Robert A. Falanga.

Scary? You bet your life! How do you protect yourself without going crazy? Read on. With these simple procedures in place, you will be well ahead of the game, and you will be in a great position to defend any question of negligent entrustment.

You need to take reasonable steps on a regular basis to show that you monitor your new hires, current workers and any “non-owner drivers.” Here’s a sample of what you can do:

New Hires:  Give them a copy of your “driver’s handbook” that includes your safe driver protocol and check list. Make sure they sign for it using the “sign off” page. If you don’t have one – go to I know they have one available. Get or have them get a copy of their current Motor Vehicle Report in your hands. DO NOT let anyone drive until you see it!

Current Drivers: Make sure you get updated Motor Vehicle Reports on an ongoing basis. I like once a month. Any accident should be reviewed and a summary kept in the drivers' file. This may come in handy if the driver goes “bad” and should be fired.

Monitoring 101

You can have the drivers bring you a copy of their Motor Vehicle Report – but I don’t recommend it – it’s tiring, cumbersome and inefficient. I suggest that you use an outside service to do it. There are firms that will put your driver list on file and pull reports on a monthly basis and update you automatically.  No muss, no fuss – happens in the background without you doing the work.  I know of one service (License Monitor) that will monitor your drivers 24/7. This is really slick and cost efficient – if anything hits the Motor Vehicle Report for a listed driver you get an email notification right away!

The Pizza Trade Association ( is cutting a deal with License Monitor for members. Check them out too.


This is NOT a subject for discussion. You are vulnerable and you have to act. The system is simple. You don’t have to spend big bucks to do this. If you need more help, email me at, and put “negligent entrustment” in the subject line. I’ll send you the contact info on License Monitor, Pizza Trade Association and some basic compliance steps. Finally, my standing offer – if you have any questions I invite you to call me at 201-945-3100.