Is Your Business At Risk? - Management
Construction Equipment Distribution magazine is published by the Associated Equipment Distributors, a nonprofit trade association founded in 1919, whose membership is primarily comprised of the leading equipment dealerships and rental companies in the U.S. and Canada. AED membership also includes equipment manufacturers and industry-service firms. CED magazine has been published continuously since 1920. Associated Equipment Distributors
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Is Your Business At Risk?

CED Magazine, June 2006

Article Date: 06-01-2006
Copyright (C) 2006 Associated Equipment Distributors. All Rights Reserved.


Strategies for effective fleet safety programs.

If your daily operations depend on having employees on the road your business may be at great risk. Whether your employees are driving a company-owned vehicle or a personal vehicle for business purposes, you are exposed to property damage and costly liability lawsuits.

 

Consider these real-life examples:

An employee was given permission to drive a company-owned vehicle to and from work. One night, on the way home from a wedding, he caused an accident that seriously injured a pedestrian. His employer was sued for negligently entrusting the vehicle to the employee and was ordered to pay the plaintiff $2 million. The business had only $1 million in coverage and was responsible for the other $1 million.

A pedestrian was killed when the driver of a company-owned truck hauling a machine on a lowboy trailer lost control and ran through a crosswalk at an intersection. Inadequate maintenance and defective brakes were found to be at fault. The plaintiff was awarded  $1.3 million for the wrongful death.

An 18-year-old driver, who had been employed less than six months, lost control when driving a company-owned car and hit an oncoming car head-on. Beyond causing serious injuries to himself, and the occupants of the other car, he was cited for driving too fast for conditions. His motor vehicle record revealed a poor driving history, as well as an arrest for driving while intoxicated three months prior. The final claim settlement exceeded $500,000.

Accident costs include more than just claim costs and court settlements. They may include cancellation of insurance coverage, increased insurance deductibles and premiums, interrupted or delayed service, lost revenue, workers’ compensation claims, loss of management time and expense relating to litigation, and negative publicity that could impact revenue.

The key to preventing loss and reducing these costs is a fleet safety program. Seven strategies for creating an effective program follow.

Select Drivers After Careful And Thorough Review

When selecting drivers, take into consideration the applicant’s ability to safely operate a vehicle. This decision can be determined by using information on applications, contacts with prior employers, written or road motor vehicle tests, and medical examinations.

Choosing incompetent drivers could result in your business being liable for negligent entrustment. Negligent entrustment is assigning duties to someone without exercising proper care. In negligent entrustment cases, punitive damages are awarded to punish the employer for wrongdoing.

In many states, insurance companies will not or cannot pay punitive damages. Settlements of more than $1 million for punitive damages are not uncommon.

Driver selection is one of the most important defenses against negligent entrustment. Understand federal and state fair hiring laws when selecting and hiring drivers. Your guidelines must meet these laws and be applied consistently and fairly. Have an attorney review your employment documents and advise you on the legality of your selection practices.

Use Motor Vehicle Records To Review Driver History

Statistics show drivers who have had one accident or traffic violation in the past five years are twice as likely to have another accident or violation as an accident-free driver. Drivers with two accidents or violations are three times more likely to have another accident or violation as an accident-free driver.

Because of this, obtaining motor vehicle reports is an essential component of a fleet safety program. These documents are usually provided in the form of a computer generated driver record abstract, and generally contain dates and types of traffic convictions, accidents, restrictions and revocations.

Motor vehicle reports can be obtained from the motor vehicle department in each state where the employee has lived, worked or been licensed in the past five years. Most states require you to complete a form and pay a fee for each request. Motor vehicle reports can also be obtained over the Internet.

Employees should be prohibited from operating any vehicle for business purposes until their motor vehicle records have been reviewed. Careful consideration should be given to employees with less than satisfactory driving histories.

Motor vehicle reports should be ordered for all drivers on an annual basis, or when you receive complaints of poor driving behavior or notice excessive maintenance expenses, or if there is suspected vehicle abuse or an accident or moving violation occurs.

Establish Safe Driving Policies

A fleet safety program should establish safe driving expectations. These expectations should include:

  • Obeying traffic laws
  • Exercising courtesy to other drivers
  • Refraining from cell phone usage
  • Transporting authorized passengers only
  • Requiring seat belt usage
  • Reporting accidents immediately
  • Refraining from eating while driving
  • Prohibiting driving while under the influence of drugs or alcohol.
To be effective, a fleet safety program needs commitment and direction from top management and to be understood by employees. Employees' signatures should be obtained to document acknowledgment of the policy and their agreement to abide by it.

Define penalties for violating safe driving expectations, as you would for any other violation of company rules. Counsel drivers who are developing a poor driving record and consider placing them on a one-year probationary status. If the record becomes unacceptable, stronger measures, including reassignment to a non-driving position or termination, may be necessary.

Train Drivers Thoroughly

Employees that drive for business purposes should be trained on safe driving practices. Formal classroom training, behind-the-wheel instruction and online training are viable methods.

Driver training is not limited to operation of a vehicle. Many serious accidents result from the use of trailers and improper hauling practices. Training should include how to properly attach a trailer, how to secure a load to prevent falling items and how to ensure the load does not exceed weight specifications.

Inspect And Maintain Your Fleet Regularly

Well-documented maintenance records and inspection reports should be part of a fleet safety program. These records can be used for scheduling routine maintenance and repairs, and for legal defense should an accident occur.

Certain vehicle maintenance procedures and records are required for commercial motor vehicles used in interstate commerce. State and federal laws also require trucks to carry emergency equipment, such as fire extinguishers and emergency reflective triangles.

In addition, many new technologies are available to improve the safety of commercial fleet operations, including vehicle-mounted cameras, collision avoidance systems and black box devices that record vehicle performance and safety data.

Investigate All Accidents Promptly And Thoroughly


While hiring safe drivers and keeping a well-maintained fleet can help prevent accidents - it can't prevent them all. When an accident does happen, it is in your best interest to know exactly what happened and why.

A formal accident investigation process is an important part of your fleet safety program. Accident investigation is more than just filling out the proper forms. It is a system of collecting and documenting factual evidence, determining preventability and taking steps to prevent reoccurrence.

A good accident investigation process should also include training drivers on how to conduct themselves at the scene of an accident, procedures to follow for notifying authorities and your company, how to obtain witness statements, and how to protect the vehicle and its cargo.

Many insurance companies provide accident forms or glove box kits that provide drivers with information and tools for accurate and timely accident reporting. Carrying a disposable camera to take photos following an accident can help document conditions at the scene and resolve your insurance claim. Photos should be limited to vehicle and property damage, and should not include injured persons.

If you operate as a motor carrier under Federal Motor Carrier Safety regulations, numerous rules apply for reporting accidents. Under certain conditions, the rules also require post-accident drug and alcohol testing.

Prohibit Or Limit Business Use Of Personal Vehicles

Finally, a process that pertains to using a personal vehicle for business purposes should be included in a fleet safety program. This should include:

  • Enforcing the same rules and expectations established for company-owned vehicles.
  • Checking drivers' insurance coverage, regularly, to make sure they have adequate limits. A Combined Single Limit (CSL) of insurance of at least $500,000 is recommended.
  • Requiring drivers to provide a current certificate of insurance or a copy of the policy page that states their coverages and limits.
Even though your employee is operating a personally owned vehicle, you may be named in any suit against an employee if he or she is involved in an accident during the course of business. Be aware of these potential liability exposures and be prepared to control them.

Use these seven strategies to build an effective fleet safety program - doing so can help minimize your risk associated with vehicle safety.

 


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