By Rich Radi
Businesses invest a substantial portion of their budgets in their fleets, from the vehicles themselves to fuel to maintenance to insurance. And, like all investments, it’s important to protect it. One of the best ways to ensure the longevity of company vehicles is to develop a comprehensive safety program that ensures drivers aren’t taking actions that could directly impact the company’s bottom line. Risky driver behavior leads to more accidents, additional wear and tear on vehicles and fuel inefficiency. But, by working with fleet management companies, fleet owners can successfully improve employees’ driving habits and reduce the operating cost of vehicles through driver behavior and crash-data analysis, proactively enforced corporate fleet policies and driver training.
Accidents are expensive
The potential for accidents and injuries to employee drivers are obvious risks to organizations with a fleet of vehicles, but the overall risk is much bigger than one may think. Without a comprehensive risk and safety program in place, the costs and liability associated with accidents can impact multiple aspects of an organization’s daily operations.
Two national agencies have worked to estimate the real cost of an accident. The Occupational Safety and Health Administration (OSHA) estimates the average cost of a motor vehicle crash is more than $16,000 (USD) per crash, if there are no injuries, $74,000 if there are injuries and more than $500,000 if there are fatalities. According to the Insurance Institute for Highway Safety, a seven-percent increase in deaths due to motor vehicle crashes occurred in 2015 compared to 2014, the highest number since 2008. The most recent data also finds that traffic crashes cost employers $47.4 billion in 2013, with on-the-job highway crashes equaling $24,000 per crash and $68,000 per injury. When you consider that 10 to 20 percent of a typical fleet’s vehicles are in crashes every year, motor vehicle accidents can be a significant cost to an organization.
Damage to the vehicle, litigation, driver downtime, lost productivity and workers compensation claims escalate costs quickly. In an instant, an accident can negatively impact the fleet’s bottom line. There are additional soft costs that often get lost in discussions about risk, compliance and safety. This includes the expense related to the repair of the vehicle, lost productivity and vehicle downtime, including the cost of a rental, which can be especially expensive for specialized vehicles. Simply put, a damaged vehicle is not out on the road generating revenue by servicing the needs of the business.
How to reduce liability exposure
To most effectively mitigate risk, corporations should establish a comprehensive fleet vehicle policy, implement driver monitoring technology and take immediate action when risky driver behavior is identified. A well-written policy is a critical tool for creating a common vision among all stakeholder departments and for outlining expectations for drivers throughout an organization. Keeping your vehicle policies up to date ensures that procedures surrounding all aspects of vehicle use are clearly outlined for all levels within a company and also helps to maximize efficiency and improve safety.
Though a fleet manager can’t be in the passenger’s seat with every driver, technology has evolved to deliver the next best thing. Telematics technology allows companies to be proactive and prevent problems before they occur, revolutionizing driver safety and training. Fleet managers can now see employees engaging in poor driving habits (such as speeding or harsh braking) in real time, and action can be taken immediately to correct the behavior, rather than waiting for an accident to happen. Training can be assigned and completed via mobile devices, giving drivers flexibility—and no excuse—when needing to complete required courses.
Conversely, fleet managers can also see drivers who are following company policy and reward them, which enforces a larger safety message within the organization. The trend is not just for systems that use the data to develop reports that say what happened after the fact, but instead creates information that uncovers actionable insights. Tools are available today that tell businesses where to find the risk instead of requiring a fleet manager to review reports, look for risk and interpret the data into actionable information. Risk and safety professionals can now spend their time understanding how to preemptively solve problems.
Using online tools effectively
The corporate fleet policy can now be provided as an online module to confirm not only that drivers read the policy, but to test them on it as well to ensure comprehension. When an infraction occurs, a proactive safety program should immediately assign targeted training to drivers. Additionally, refresher safety training on specific topics (such as backing up in a parking lot, drowsy driving and understanding distracted driving) should be provided periodically throughout the year.
The benefits of a fleet safety program are, first and foremost, a safer environment for your employee drivers and the communities in which they operate. Fleets with a comprehensive safety and driver training program can also experience lower costs with regard to accidents, vehicle repairs and vehicle downtime. In terms of soft costs, businesses can see reductions in fuel and maintenance costs, as well as the possibility of lowered insurance premiums, especially if they share telematics data directly with the insurance carrier. Taking proactive, preventative measures, like clearly and regularly communicating your safety policy to your drivers and implementing regular training, can also have a positive impact when it comes to negotiating with your insurance carrier.
When a company’s driver is involved in an accident, the reputation of the company is also at risk. The company name may be on the side of the vehicle and can instantly become a target for litigation if the driver is at fault. If an organization has adopted a proactive safety program, however, that incorporates an extensive fleet policy coupled with the latest technology to monitor behavior and targeted training modules, the opportunity for risk is greatly reduced. And that peace of mind for everyone involved is invaluable.
About the author
Rich Radi is a director of product management with ARI, responsible for the company’s premier workplace and fleet safety program, ARI Driver Excellence®. He has more than a decade of experience in developing solutions focused on driver safety using technology and advanced learning techniques.