Don’t Confuse a Good Insurance Policy with Fleet Safety
December 1, 2004
• by Chris Brown
“Of course I want my drivers to be safe. I don’t want them to kill themselves or anyone else out on the road. But I’m extremely busy running my business, and finding the time and money for this safety stuff is tough. I’ve got a solid insurance policy—if I do get sued, the insurance company takes care of the lawyers and will pay the big settlement if it happens.”
Okay, this isn’t a direct quote from a Business Fleet reader. I don’t think anyone would admit to viewing fleet safety as a hassle. But this unspoken notion is not uncommon among small business owners.
The potential for a lawsuit can seem like the roll of a million-sided dice. How much time, money and resources do you expend to prepare for a seemingly far-off possibility? That’s missing the point. The primary focus of fleet risk should not be to minimize liability exposure, though this is important. It should be to minimize crashes.
A good insurance policy will protect your company from the possibility of financial devastation, yet it does nothing to reduce loss. Insurance kicks in because of, and only after, some very real destruction—after the accident, after the cost to repair or replace the damaged vehicle, after the medical care expense, after the time lost from work, after the blow to company morale, after administering the insurance claims, after the pain and suffering of the family and after the cost to retrain and refill that position.
Jim York from Zurich Risk Engineering supplied some relevant statistics from an insurer’s point of view. He said the average worker’s comp claim for a motor vehicle accident is three times the average of all injury claims. And the indemnity component of a vehicle crash (the lost wages paid out) is three times greater than the average piece of the worker’s comp pie.
This means that compared to other work-related injuries, car crashes cost a lot more money, and employees lose many more workdays than the average injury—three times more. Would you say your company expends three times more resources toward driver safety than other forms of work safety?
There is the issue of motor vehicle records. Obtaining, keeping and assessing MVRs can be a hassle if you don’t have a streamlined system in place. As such, many small businesses rely on their insurance company to tell them whether an employee is unfit to drive a company vehicle. Yet a carrier is only allowed to tell you whether a driver fits its business auto policy’s criteria for acceptability. Specifics of the record, i.e., types and severity of violations and accidents, cannot be disclosed.
Remember those classes you could take “pass/fail” instead of getting a grade? “Passing” encompassed grades of D minus to A plus—a wide discrepancy of competence. Letting the insurance company tell you who passes or fails its minimum acceptability requirements leaves you in the dark as to where your drivers fall on that spectrum. You’ve given up the ability to deal with your fleet risk before your insurance company gets involved. You’ve handed over the blueprints of a safety program to someone else.
Though insurance companies must withhold certain information, they’re not in the business of having a combative relationship with their clients. Agents view the carrier/client relationship as a partnership. After all, it is in their best interest to keep claims to a minimum. Many carriers offer workplace safety initiatives, some of which are already built into your premium. They operate under the philosophy that a company’s most valuable assets, by far, are its employees. That philosophy ties in with the most relevant statistic of all when it comes to fleet safety—roadway crashes are the leading cause of work-related fatalities. No amount of insurance will get those lives back.