Smoothing the road

Risk managers, however, don't have to sit back and accept poor commercial auto performance. Far from it. Partnering with their agents, brokers and insurers, they can take nine specific steps to better manage the line:

Implement a fleet safety program – Anything measured can be managed. So understand what's causing accidents, set goals for improving performance and develop a detailed plan for managing fleet safety. Regularly highlight the plan for all employees.
Enforce company policy on vehicle use – Clearly define who can use a company vehicle and create a process for approving who can drive their personal car on company business. The use of personal vehicles for company business can open the employer to potential exposure for any resulting accidents or damages and needs to be carefully managed.
Hire qualified drivers – Professional drivers are a company's first line of defense against accidents. A resurgent economy can limit their supply, but lowering hiring standards may have significant safety implications.
Consider a company fleet – Minimize the potential exposure of employees using their personal vehicles for company business. Conduct a cost/benefit analysis – based on a full understanding of this exposure – to decide whether a company fleet makes sense.
Train drivers – Go beyond making sure drivers understand the company's equipment and driver management program. Be sure they get the company's total commitment to safety and its central role as a core corporate strategy never to be compromised.
Regularly check driving records – Checking driver records is not a one-and-done process. Like all important workflows, it is a constant. So set a schedule for checking the driving records of professional drivers, and those employees who regularly use their personal vehicle for company business.
Use telematics – Many fleets work with telematics vendors to help manage fuel, delivery routes and maintenance. However, these systems can also play a key role in tracking and improving driver performance.
Review all crashes– Unfortunately, accidents happen, even to good drivers and companies fully committed to safety. Those companies with the safest fleets learn from these events. Companies should provide drivers with accident kits that help collect key information immediately following an accident. This information can help defend against potential litigation and improve future driver performance.
Explore increasing primary Auto coverage limits – The boundary between primary and excess commercial auto policies has remained relatively constant over the past two decades, at $1 million. During that time, growing medical, legal and repair costs have eroded the protection provided by that limit. Today's $1 million is insufficient protection. Commercial auto buyers can work with their agents, brokers and insurers to identify the benefits of increasing that primary limit and attaching to the excess policy at a higher level.

The challenges with the commercial auto line are clear. So too is the route to better managing that line to protect employees, the public and a company's bottom line.

Special Reports /

Smoothing a rough road: Understand the drivers of commercial auto insurance costs

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