Developing a Comprehensive Personal Auto Fleet Safety Program

Developing a Comprehensive
Personal Auto Fleet Safety
Program

Aon Technical Services presentation
Insert Business Descriptor

Chad B. Krueger
Risk Control Consultant
Nicolet Chapter-ASSE
September 12, 2007

“Motorists have exhibited the one
worse attitude than defiance of the
law – indifference to it.”

Frederick Dwight - 1908
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Aon Technical Services

William Phelps Eno (1858-1945)

• Does anyone know who this man is?
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William Phelps Eno (1858-1945)

• The “Father of Traffic Safety
– Born in New York City
– Developed the worlds first traffic code
• Designed:
– The stop sign
– One-way streets
– Pedestrian safety islands
– Taxi Stands
– Traffic Circle
» He designed the traffic circle around the Arc de
Triomphe in Paris
• He was an avid fan of horse back riding
• He never once drove a car, referring to the automobile
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as a “fad”
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Why are we here????

• Just this morning on Hwy 41
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Why are we here????
• Fleet Programs are a Risk Management Best Practice
– “Best of the Best” “What are other companies doing?”

• Concerns about Negligent Entrustment?

• OSHA’s Guidelines for Employers to Reduce Motor Vehicle
Crashes-They want to see our fleet programs!!!

• Insurance Company Requirements?

• High Frequency of Motor Vehicle Accidents?

• Some Employees have lost their License.

• An uneasy feeling that Fleet Safety needs to be addressed but we
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are not sure how to start.

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What is a driver???

• Not just CDL/DOT Drivers regulated by FMCSRs.

• The driver of any vehicle operated on public roads

• Understand that you are not just hiring a:
– Salesperson
– Foreman
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Accident vs. Collision

• Accident:
– Implies the event is not preventable

• Collision:
– An event that is generally the result of human error

• 90% of crashes is caused by some type of human
error!!!
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NCCI Study
National Council on Compensation Insurance-Dec. 2006

• Traffic Accidents—A Growing Contributor to Work Comp Losses
– Key Findings:
• Motor vehicle accidents are more severe than the average workers
compensation claim, comprising close to 2% of claims but more
than 5.5% of losses, on average, from 1997 to 2003. They are
more likely to be lost-time and comprise a disproportionate share
of the most severe claim types.
• Risk varies by type of vehicle. Frequency of fatalities is higher for
trucks; frequency of nonfatal injuries is higher for passenger
vehicles.
• Motor vehicle accidents comprise a growing share of workers
compensation injuries. Frequency is declining but at a slower pace
than for workers compensation claims overall.
• In terms of claims characteristics, motor vehicle claims impact a
diverse range of occupations in addition to truckers (particularly
salespersons and clerical). Top diagnoses include neck injuries,
duration is more than 70% longer, subrogation is significant, and
attorney involvement is greater.
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• Driver attitudes and driving practices are essential to safety, and
employers can play a large part in encouraging safe practices and
procedures.
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NCCI Study
National Council on Compensation Insurance-Dec. 2006
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Issues
• Motor Vehicle Crashes are the #1 Killer of the American
Work Force

• OSHA

• Negligent Entrustment

• Employee Privacy (MVRs)

• Autos not owned by the company

• Defensive Driver Training

• Brand Risk???
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Work Related Fatalities
Census of Fatal Occupational Injuries (CFOI) - 2006
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Census of Fatal Occupational Injuries (CFOI) - 2006
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• Organizations likely spend a large amount of
resources to combat the standard causes of injury
and fatalities
– But we tend to be oblivious to the #1 cause

• Every responsible organization must develop a
fleet safety program if they wish to have a top-
notch safety program
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What is Negligent Entrustment?

• First a disclaimer

– I am not a lawyer!!!
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• A legal term that means you trusted someone with
something dangerous, and you knew or should
have known better than to trust that person.
– Companies are liable for the damages caused by
the untrustworthy person
– “I didn’t know” defense does not work

• For organizations, this occurs when vehicles
(owned or non-owned) are trusted to unworthy
personnel
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• “More and more companies are on the firing line
for N-E lawsuits, as the victims and their attys. can
be assured of a larger payout if they win. Orgs.
with high profiles are especially vulnerable to
claims of N-E, whether they’re true or not”
– Ed Dubens, Pres. Interactive Driving Systems

• “The climate today is such that the law says a
company that entrusts an employee with a vehicle
should know if the employee is qualified to drive
it.”
– Jim Colangelo, V.P. PHH Arval
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– Dealing with Employees a the (Roulette) Wheel, Risk & Insurance Mag., April 2007

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• Examples or Entrustment:
– Client appointments
– Jobsite visits
– Temporary or summer help run errands
– Security Guards use Co. vehicles to make rounds
– Driving to other company locations
– Delivering equipment or supplies
– Driving clients to lunch
– Rental cars on business trips
– Company provided vehicles…family members?
– Picking up mail

– Any driving actions that contribute to the organization.
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• Examples of Negligent Entrustment:
– Dealing with Employees at the (Roulette) Wheel,
Risk & Insurance Mag. April 2007

– Socially unacceptable driving records
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Insurance Carriers

• Fleet Policies are no longer an option
– Organizations submit driver lists & the Ins. Co. “runs” the
records of most if not all drivers on the list
• Overall risk does effect ins. availability and pricing.
– MVRs run by Ins. Cos. (or brokers/agents) can not be shared
with the insured. (Fair Credit Reporting Act.)
– An unapproved driver means the Ins. Co. will not insure that
driver.
• Can be an issue at renewal time
• Additional cost

– Recent Risk: Out of 23 drivers run by the carrier, 12 were not
acceptable.
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• Orgs. Must take ownership of the MVR process!!!
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We Must Check Driving Records!

• Its the only way to determine driver safety
– But he’s a really great worker…
• Orgs. must take ownership of the MVR process
– Consider who really needs to be a driver
– Manage the list and update it frequently
• Approved Driver List
– A constantly updated list that reflects all authorized
drivers with acceptable MVRs
• Develop one…only actual drivers
– Do not let the Ins. Co. dictate the process
• You should know…
• There should be no surprises
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How often?
– Before hire, bi-annually, annually, semi-annually ?
• Privacy?
– Employee
– Spouse
• Ignorance is not bliss?

– The plaintiff lawyers are prepared, your organization
should be as well.
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• Where can we get them?
– States: WI DOTI Program
– Employees can get them
– National Programs
• Background Check Companies like USIS
– They are obtainable
• Must have employee authorization (FCRA)
• There is a cost $$$
– WI $5
– MI $2
– Normally between $2 & $12
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What is an “Acceptable” MVR?

• Driver’s License = Safe Driver?

• See: General Motor Vehicle Record Acceptability Standards

• Socially acceptable driving record
– Will your standards hold up with a jury?
– Are you consistent?

• This all boils down to:
– If the worst happens, will our fleet safety program be
defensible?
– Or will we be forced to make it more stringent after the
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settlement/verdict?

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Consider using a Company Vehicle
Waiver
• See: XYZ Company Vehicle Waiver

– They are like an umbrella.
• They do not stop the rain, but they may keep you dry.
• In other words, they will not keep you from being sued
– but they may reduce the company’s liability.
• And, since wrongful death suite can easily cost
plaintiffs millions, they are work the effort!!!

– Should be issued to all new drivers, updated and
reissued annually with any policy changes.
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– Fleet safety should be in the forefront.
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What are the Components of a Fleet
Safety Program? (OSHA, NHTSA & NETS)
1. Sr. Mgt. Commitment & Employee Involvement
2. Written Policies and Procedures
– Seatbelts, cell phones, distracted driving
3. Driver Agreements
4. Motor Vehicle Record Checks
5. Crash Reporting and Investigation
6. Vehicle Selection, Maintenance and Inspection
7. Disciplinary Action System
8. Reward/Incentive Program
9. Driver Training/Communication
10. Regulatory Compliance
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Safety Program? (OSHA, NHTSA & NETS)
• In addition to the DOT, State, Ins. Co., FMCSA
and others OSHA is now interested in our fleet
programs
– Due to the injury and fatality rate, they are no
longer allowing just the DOT to have jurisdiction
– If your org. is inspected, expect them to ask to
“review” your fleet policy

– Could it be a precursor to a new standard???
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Safety Program?
1. Sr. Mgt. Commitment & Employee Involvement
– It must be supported: CEO, CFO, COO, V.P. of
Sales, HR Director, Safety, Risk Manager,
– They must agree and sign off
– It must be enforceable and not just a “feel good”
document
• Examples: V.P. of Sales, Forman Crew
– Can we enforce it if our best sales person, #1
employee or the owner’s son must be removed
from driving privilages?
• If not, the company could have issues in court
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Safety Program?
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Safety Program?
2. Written Policies and Procedures
– Seatbelts
– Cell phones and Personal Electronic Devices
• What is safe use
• Liability-Cell Records
• Monitor Use
– Alcohol and Drug Use Policy
• Acceptable Use or Zero Tolerance
• Acceptable BAC: .00, .04, .08, State Regs.,
International Regs.?
• Education is key
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– Distracted/Drowsy driving
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Safety Program?
3. Driver Agreements
– Contract with all employees who driver for work
• Whether they drive assigned company vehicles or
personal vehicles
– By signing the agreement the driver acknowledges
awareness and understanding of the orgs.:
• Traffic Policies
• Procedures
• Expectations Regarding:
– Driver Performance
– Vehicle Maintenance
– Reporting of Moving Violations and Reportable
Accidents
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Safety Program?
4. Motor Vehicle Record Checks
– Already Discussed
• Must screen out drivers with poor records.
– They are most likely to cause problems
• Reviewed at least annually to ensure they maintain a
good record
• Clearly define the # of violations and driver can have
before losing the privilege of driving for work, and
provide training where needed

– Q: If a person’s MVR is outside the company
policy, should we have them get their own car and
insurance?
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Safety Program?
5. Crash Reporting and Investigation
– Establish and enforce this process
• All crashes regardless of severity should be reported
to the org. ASAP
• All vehicles should be equipped with an accident kit
• Company fleet safety policies should guide drivers
through their responsibilities in a crash situation
• Crashes should be reviewed to determine their
cause and whether or not they were preventable
• Understanding the root cause and why they are
happening, regardless of fault, forms the basis for
eliminating them in the future.
– Just like any other safety policy or program
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Safety Program?
6. Vehicle Selection, Maintenance and Inspection
– Selecting, maintaining and routinely inspecting company
vehicles is an important part of preventing crashes and
related losses
– Vehicle safety features
– Routine Preventative Maintenance
• Mileage Intervals
• Mechanic should conduct thorough inspection of each
vehicle annually-Documented
• Personal vehicles may not be subject…However
– About $20 for a Complete Vehicle Safety Inspection
» WI State Vehicle Certification Form complete
» Checks: Tires, Lights, Brakes, Coolant, Etc. Anything that
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contributes to the safe operation of that vehicle

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Safety Program?
7. Disciplinary Action System
– Develop a course of action after an incident
• Assign points for crashes and violation
• Progressive Discipline if a driver begins to develop a
pattern of repeated violations or accidents
– Defensive Driver Training
» Determine a way to keep the person as a driver
before they are outside of your criteria
• Systems should describe specific actions that will be
taken if a driver accumulates a certain # of violations
or preventable crashes in and pre-defined period
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9/17/2007 ANSI Z15.1:2006-Driver Eligibility

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9/17/2007 Driver Eligibility and Risk Levels

• Point values differ from state to state. An internal system should be
established to include a standardized interpretation
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Safety Program?
8. Reward/Incentive Program
– Helps make safe driving an integral part of your
business culture
– Safe driving behaviors contribute directly to the
bottom line and should be recognized as such

– Positive results are realized when driver
performance is incorporated into the overall
evaluation of job performance
(performance review)
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Safety Program?
9. Driver Training/Communication
– Seriously…
• Provide continuous driver safety training and
communication
– Believe it or not:
• Even experienced drivers benefit from periodic DDC
training
» Smith System, NSC DDC, VFRM, Virtual Driver
Interactive
– Reminders of safe driving practices and skill
– It is easy to become complacent and not think
about the consequences of our driving habits
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Safety Program?
10. Regulatory Compliance
– State, Federal and International motoring laws
• Speed limits
• Cell phone use
• Construction Zones
– National Highway Transportation Safety
Administration (NHTSA)
– Federal Highway Administration (FHA)
– Employment Standards Administration (ESA)
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Promote Safety Driving Practices to
Protect Your Most Valuable Investment

• Your Employees!!!
– Other areas of training that should be addressed via
policy:
• Securing Materials for Transport
• Seat Belt use
• Distracted Driving
• Alcohol and Drug Impaired Driving-How to recognize
• Fatigued Driving
• Aggressive Driving
• Young Drivers

– Each one of these could be a training session in itself!
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Conclusion

• Ultimately, just like other safety programs, we must
utilize and provide the proper tools to ensure the
safety of our employees at all times.
– Including, while they are on the road

• Incorporate sound Risk Management techniques that
will help provide a safe working environment for our
employees and help keep the general motoring
public safe

– It’s the right thing to do and its good public relations

– Questions?
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Developing a Comprehensive Personal Auto Fleet Safety Program

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