Commercial auto continues to be a challenging line for buyers, agents and brokers. According to the Insurance Services Office, auto loss costs increased a cumulative 20% from 2012 to 2015, driven by increased claims frequency and severity. Some reasons behind this are medical cost inflation and higher costs for new replacement vehicles. In addition, as the economy moves upward, there are more vehicles on the road. This increased activity, combined with phone and other behind-the-wheel distractions, lead to more accidents and claims.
Companies with strong fleet management programs can minimize the potential negative consequences of these trends on their total commercial auto costs. Here are some risk management best practices to help businesses better protect their drivers, fleets, and bottom lines:
Establish and use motor vehicle record (MVR) criteria when hiring drivers.
Criteria can vary by business type and driver responsibilities. A business that transports passengers should have tougher criteria than one whose vehicles are only used by sales representatives. Most companies will not hire drivers with more than two violations in the previous three years. But not all violations are treated equally; driving 6 to 10 miles per hour (MPH) over the posted limit may be handled more leniently than driving 20+ MPH over the limit.
Document employees authorized to operate vehicles on company business.
This applies to all businesses. If your business needs to send an employee out on a critical errand, having an approved driver list can help avoid selecting someone without a valid driver’s license or enough insurance coverage.
Establish minimum standards for non-owned vehicles.
Your fleet safety program should apply to all vehicles used for company business ? even personal ones. If employees uses their own cars, make sure each employee has a current license, carries adequate policy limits, and accepts the responsibility to keep his or her vehicle well maintained.
Establish policies on distractions and scheduling.
Prohibit texting behind the wheel and consider banning phone use altogether. Studies show that a hands-free device is no less of a distraction than a handheld one. And don’t unintentionally encourage employees to disobey your policy by having dispatchers and others call while drivers are on the road. When scheduling, make sure drivers have enough time to complete their routes safely and limit time behind the wheel to reduce the risk of fatigue.
Document fleet safety program expectations; regularly communicate them to employees.
A big part of effective communication is how a business owner or manager frames the conversation. There’s a difference between, “It’s not safe to talk on the phone when you drive” and “We have a policy about not using the phone when you drive.” It is not about the message, but rather clearly setting expectations for the drivers.
Establish and follow crash report protocols.
Make sure drivers know what to do when accidents occur. Should they contact someone at the company or report accidents directly to the insurance company? What information should they gather at the scene?
Partner with the right insurer to monitor and improve program performance
A knowledgeable insurer can offer tools to help you assess your fleet program and provide feedback on how to improve it. Tools like Liberty Mutual’s Managing Vital Driver Performance can leverage existing telematics data to monitor driver behaviors and identify the root causes of poor driving. Carrier tools such as those often include frequency calculators that estimate a customer’s expected accident frequency based on a range of information (vehicle type, location, industry, etc.) and benchmarks it against actual performance.
When it comes to improving performance, driver training is important, but it may not have the impact on safety outcomes some expect. Behaviors such as alcohol use, speeding, and not using seatbelts are contributing factors in fatal accidents — risks all drivers understand even without training. Having a fleet safety program that addresses behaviors and clearly sets expectations is critical to protecting your employees, vehicles and business.