Loss control investments depend on selling top executives about their value
It's a fact that since 1992, driving has been the leading cause of job-related fatalities. While advances in vehicle safety have been dramatic, driver distraction factors–higher traffic volume, multi-tasking with technical tools, even general pressure to perform–have only gotten more difficult to manage. The resulting direct and indirect costs, moreover, are substantial and growing rapidly.
It's up to risk managers to ensure that executive management is aware of this stark reality. Are organizations doing everything possible to ensure fleet safety? This means recognizing that driver behaviors–speeding and lack of awareness–are the leading causes of accidents.
The danger of inaction is that the eventual catalyst becomes high-profile media coverage of a major incident, or relevant regulatory changes to raise awareness of the importance of fleet safety.
Too often we see programs slapped together in response to an incident. The result is more expense to quickly get the program in place without the luxury of time to ensure the program is aligned with other company initiatives.
A 2004 comparative survey of fleet policies of 69 predominantly sedan fleets across seven different industries–sponsored by Wheels Inc. and conducted by The Richmark Group in Chicago–revealed that fewer than 60 percent of organizations even have a formal fleet safety program in place.
While insurers and risk managers recognize that safe driving translates into fewer accidents, injuries and fatalities, and significantly reduced costs, the fact is that vehicle accidents represent a major cost item on the organizational bottom line.
Vehicle accident costs, in fact, were estimated at $230.1 billion in 2000, according to a cost study published by the National Highway Transportation and Safety Agency. In addition, according to the National Safety Council and National Council on Compensation Insurance, workers' compensation claims related to motor vehicle crashes are the most expensive–the average claim in 2001 and 2002 was $27,500.
Factors that have prevented many risk and fleet managers from being more proactive in implementing fleet safety strategies are varied.
At the top of the list are other pressing issues from senior management–increasing driver productivity (and hence business performance) and the need to ensure compliance with new federal or state regulations. These are must-do initiatives that can edge out time and resources needed to execute an effective fleet safety program.
In addition, there may be a tendency to view fleet accidents in the same category as vehicle maintenance–that some will be inevitable.
Finally, assessing the true costs of fleet accidents is difficult. Hard numbers can be gathered about property damage, medical, legal and insurance costs, but how can the true impact of losing a key executive or manager–lost productivity, wrong business decisions, delays in implementing critical success strategies–be accurately measured?
The difficulty of assessing the impact makes it equally impossible to measure the true return on investment of increasing overall fleet safety.
Based on measurable payback of decreased hard costs due to fleet accidents, a clearly defined and executed safety program for company fleets is worthwhile for every risk manager. Key strategic components of such programs typically include:
o Running driver motor vehicle reports.
While this is standard for most fleet program and risk managers, MVRs aren't run by a surprising one out of 10 programs. It is recommended that MVRs be run in all cases–as long as the information is utilized.
o Running MVRs for the driver's spouse.
More than 80 percent of survey respondents allow a spouse to drive a fleet car for personal use, but less than 50 percent of responding organizations run an MVR on the spouse.
Given the reality of spouse-caused accidents, it's clear that if fleet policy is to allow a spouse to drive a company vehicle, then due diligence should be executed. Running an audit to ensure consistency in fleet policies is also recommended.
o Safety training.
Programs designed to make drivers aware of leading accident causes and ways they can be prevented are increasingly used by fleet and risk managers. Behind-the-wheel safety training is valuable, but it is expensive and best used for select 'higher risk' drivers.
Self-study training.
This is more commonly used in respondents' fleets, but how it is executed makes a difference. In our own industry interviews, the consensus was that more impact was realized from shorter, more frequent training sessions than from longer annual programs–though more than half the companies surveyed did not offer a safety program of any kind.
Finally, risk managers need their entire organization to recognize that a strong fleet safety program is an ongoing process requiring long-term commitment from senior management.
It's easy for an organization to lose focus when a fleet safety program is going well–particularly when there have been no major accidents for an extended time period. Keeping executives and managers focused on supporting the program when the "need" is not imminent is an ongoing challenge.
Successful implementation and company support for fleet safety stand a better chance if the initiative is spearheaded by a well-positioned champion. Risk managers or fleet managers are the logical candidates for an internal champion–and finding an executive sponsor is crucial.
Stratford Dick is director of marketing for Wheels Inc., in Des Plaines, Ill., a privately-owned company that leases fleet vehicles to Fortune 1,000 companies. He can be reached at sdick@wheels.com.
Flag: Loss Control Tips
Communication Is Key
For changing safe driving behaviors, frequency of communication appears to be key. Regular ongoing communication via a company newsletter, Web site, reminder sessions at driver meetings or any variety of mediums may be valuable to sustain positive change in a fleet safety program.
Themes organizations may find useful to improve driver awareness–especially avoiding common distractions–and to reinforce fleet safety policies cover a wide range. Examples that have been found effective include:
o Drive Safely Work Week (sponsored in October by the Network of Employers for Traffic Safety or NETS).
o Tire Pressure Check Day (reminder to the entire fleet to check tire pressure, for safety as well as fuel efficiency purposes).
o Seatbelt Awareness.
o School in Session Reminders.
o Winter Vehicle Preparation.
o Importance of Preventive Maintenance.
o Pre-trip Vehicle Inspection.
o Safe Following Distance.
o Tips for Recognizing Road Rage Risk.
While insurers and risk managers recognize that safe driving translates into fewer injuries and fatalities and significantly reduced costs, vehicle accidents represent a major cost item on the bottom line.
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