Corporate Fleet Vehicles
The most important financial risk for most businesses today is vehicle liability. Why? It affects everything: the bottom line, competitiveness, pricing, and most important, the company’s assets. And it therefore impacts the potential growth of the business.
For most small businesses, a major liability claim – someone killed or seriously injured in a crash - can drastically change the financial condition of the company. In a moment! If your employee is driving a vehicle on company business, YOU are probably responsible for what THEY do! Whether it is a company or personal vehicle.
The first step is to recognize the risks. There are multiple areas of risk, and many things a business owner can do to decrease the risk. If you recognize this, you have done more than many businesses. The objective is: 1.) Identify the risks; and 2.) Strategies to manage the risks? It is called Risk Management for a reason! But you need to know what you can do about it!
When a company has to “use” their coverage, someone has to pay for it in the future. Underwriting is done by insurance companies on the basis of their “experience” with that business. Premiums are based upon experience!
Strategies for Protection
Triangulation in a structure creates strength and stability. So let’s define the critical areas of protection: Evaluation – Training – Policies and Procedures.
Evaluation:
Just because an employee has a driver’s license, does not mean that he is a skillful driver. How does he handle a crisis situation? Can he manage himself during stress? Can he manage the vehicle he is driving in a slick road condition? Is he familiar with the weight and limitations of that vehicle? Does he know how to use the systems of that vehicle?
Or do they just have a driver’s license, and have a few points left on their license?
Training:
Every business has training programs to do the specific tasks of that business or job. An electrical contractor does not hire an electrician who has not been trained first as an apprentice and then as a Journeyman electrician. If that employee is going to be driving a company vehicle, putting the company at risk, would it not be appropriate to expect that he be trained for the situations your driver will encounter, skillful enough to handle crisis situations, weather conditions, limitations of that vehicle, etc. And then to have an objective measurement of their skill and abilities in order to drive a company vehicle.
One of the most important concepts to manage risk is becoming defendable. That is, the failure to train can put a company in an undefendable position. Training can increase “defensibility” of the company and its drivers. Most driving safety programs are done to check the box. Training is done to reduce a risk!
Policy and Procedures:
The policy and procedures relative to driving a company vehicle should be clearly and thoroughly defined in a manual. The policies should cover such things as: Who can drive a company vehicle? Personal use? No unauthorized drivers. DMV records updated periodically. Number of points allowed. No impaired violations. The company’s expectations as to what is necessary to accomplish the job. Accident report instructions. Pre and Post inspection of the vehicle. Etc.
In a recent court case, a former employee testified that he felt his manager “expected him to exceed the speed limit in performing his courier duties”. Can you imagine how the court ruled in this case?
Every driver should become a good defensive driver. Otherwise, it is a matter of time before they will be involved in a vehicle incident. They need to know how to respond to crisis situations and conditions. They need to learn how to use the new technology systems of a new car. That would be a good defensive driver!
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