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Negligent entrustment is a legal term used in tort law. It describes the concept that an individual can be held responsible for another person's actions if the individual has provided them with a "dangerous instrumentality" that then caused injury to a third party because of the person's use of the instrumentality. In simpler terms, consider as an example that a friend loans another friend his or her vehicle and the friend driving it causes an accident that harms another person. The friend that loaned the vehicle may then be considered legally responsible for the negligence of the friend that drove the car.
This can become an important point of law if you are involved in an accident that was caused by another driver and the driver is not the owner of the vehicle that hit you. When this is the case, you could potentially sue both parties for damages.
One of the most common forms of negligent entrustment, however, is when a teenager drives the "family car," or rather, a vehicle that is owned by the teen's parents. If the teenager causes an accident due to his or her negligence, the parents may then be considered on the hook to pay for the damages.
Under a law known as the Family Car Doctrine, the parents can be held liable for damage caused by their teen, even if they haven't added the teen to their car insurance policy. Interestingly, since young drivers are generally inexperienced and considered responsible for a large percent of accidents, some insurance carriers exclude teenage drivers from their insurance policies. This is so that they don't have to deal with the application of the Family Car Doctrine in the event the teenager of a policyholder drives the family vehicle and is involved in an accident.
Individuals who have been involved in a car accident involving a teenage driver may find it beneficial to learn more about their legal rights as they pertain to their case.
Source: FindLaw, "Vicarious Liability and Negligent Entrustment," accessed April. 21, 2015