Remote broadcast vehicles are an important part of a radio station’s engagement with listeners and ENG trucks are a key resource for locally produced news shows. But it seems that traffic is heavier everywhere these days. And isn’t it amazing how a low-speed, parking lot fender bender can result in the other driver sustaining “serious injury resulting in extraordinary pain, suffering and impairment”?
While many commercial enterprises have historically had somewhat of a limited concern about vehicle fleet risk management, there are significant benefits for those companies that are pro-active in this regard. And many vehicle fleet risk management measures are easy to implement.
Besides the obvious benefit of working to minimize injuries and vehicle damage (and deductible expenses), vehicle fleet safety measures can result in insurance cost savings. Automobile insurance is now the bad boy line of coverage for insurance companies. For example, in 2016 State Farm had a $7B (billion) underwriting loss from auto insurance. To offset their losses most all insurers are bumping their auto insurance rates, especially for clients with adverse vehicle claims experience. So acting to control your vehicle claims experience will help mitigate rate increases under your commercial auto policy. Further, from a “quality of risk/desirability of account” standpoint, underwriters are positively inclined when the insured already has in place formal vehicle fleet safety measures and are somewhat disinclined towards those that do not.
DRIVER QUALIFICATION AND MOTOR VEHICLE RECORDS
A company vehicle is an important asset and its use and operation should be made available to only those employees who are properly qualified. And just holding a drivers license (apparently valid) should not in of itself deem the employee to be properly qualified. Insurance companies typically conduct reviews of employee drivers prior to policy renewal. But these reviews, wherein the insurance company evaluates motor vehicle reports (MVRs) for employee drivers, should not be relied on as the sole gatekeepers for drivers of company vehicles. First, insurance companies typically do not evaluate all drivers but rather just a subset (one out of two or one out of three drivers). Further, between the time of hire and auto insurance policy renewal almost a year could have gone by with no evaluation of an MVR having been conducted for a newly hired employee.
Many insurance companies are now pressing policyholders to take a more active role in employee driver authorization in conducting MVR reviews on their own. Policyholders are being pressed to evaluate MVRs for prospective hires prior to hire and again annually for all employees with driving responsibilities. For larger fleets and/or for companies with a large roster of drivers, these are very prudent measures. Besides the obvious benefit of identifying and disqualifying adverse drivers, the oversight of driving records by management conveys a message to employee drivers that management is concerned about employee driving experience and is actively monitoring such. For small or mid-sized fleets, policyholders should at least evaluate MVRs for prospective hires prior to hire (for all who will have driving responsibilities) with such pre-hire checks then being supplemented by submitting a fully updated schedule of all drivers to the insurer prior to renewal.
A word of note on MVRs. An MVR is a “protected document” under the Driver Privacy Protection Act and the Fair Credit Reporting Act. A consequence of this is that an employee’s employment status may not be altered or terminated based on information contained in an MVR unless the employee has first (a) granted the employer written authorization to secure an MVR, and (b) acknowledged in writing that his/her employment status may be altered or terminated due to an adverse MVR. Click here for a suggested MVR authorization form (consult with your counsel for full guidance on this).
EMPLOYEES DRIVING PERSONAL CARS ON COMPANY BUSINESS
Much of the focus in vehicle fleet risk management is on employee drivers of company vehicles. But it is important to also be vigilant with respects to employees who drive their personal cars on company business as liability arising out of such can accrue to the company. You should require that all employees who drive personal cars on company business provide you with a copy of the declarations pages of their current personal auto insurance policy every year. This is not an overbearing request – auto insurance is compulsory in all states except New Hampshire and Virginia. And even though not compulsory in New Hampshire and Virginia, the most effective means of addressing employee personal auto liability exposures (and thereby protecting the company) is thru a personal auto insurance policy.
Further, employee drivers who drive personal cars on company business should be subject to the same MVR oversight as employee drivers of company vehicles. Now the qualification criteria might be somewhat more flexible for employees who drive personal cars on company business but it is important to be attentive to their driving experience nonetheless. AEs spend considerable time out of office driving from one client meeting to another and can accumulate significant miles driven in a year. So their “opportunity” to incur moving violations and the like is elevated. And regardless of whether or not auto insurance is compulsory, having a valid drivers license is compulsory in all states. And you do not want to have an employee driving about in pursuit of company business if he/she does not have a valid drivers license.
VEHICLE FLEET SAFETY PROGRAM
While the measures discussed thus far (MVR reviews and securing proof of insurance from employees who drive personal cars on company business) are good risk management tools in and of themselves, the most effective approach to vehicle fleet safety management is to implement a formalized program with fleet safety manuals that are delivered to (and acknowledged by) all employee drivers. A formalized program can be more encompassing including management statement, display of driver qualification criteria, discussion of doctrine of negligent entrustment, accident reporting procedures, and the like. And a fleet safety manual conveys to all the importance of the matters discussed and serves to make all fully aware of management’s expectations, company protocols and procedures – it gets everyone on the same page. Click here for a suggested Management Team Fleet Safety Manual and click here for a suggested Employee Driver Fleet Safety Manual.