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An accident waiting to happen… How much insight do you have into your workers’ driving records and habits behind the wheel?
Cynthia Woods : Aug 15, 2023 10:11:05 AM
How impactful is driver safety to an organization? According to the 2019 Network of Employers for Traffic Safety (NETS) report “In 2018, 1,800 fatalities and 379,000 injuries occurred while (driving) on the job.” While this statistic is sobering on its own, the report further identifies “motor vehicle crash injuries on and off the job cost employers $72.2 billion in 2018.” Motor vehicle accidents are the leading cause of worker injuries for US companies. While many companies recognize the risk posed by drivers operating company-owned vehicles, they are often less aware of the risk posed by workers driving their own personal vehicles for company benefit. As a recent article by Risk and Insurance highlights jury awards exceeding 1 billion dollars are not unheard and they are having a significant impact on commercial auto liability insurance rates.
Most drivers maintain approximately $50K-$100K coverage in personal auto liability insurance. The increased technology incorporated into most automobiles today has led to significantly higher overall damages per accident even when no injuries or deaths occur due to increased vehicle repair or replacement costs. Further, the National Safety Council averages the cost of a fatality due to a motor vehicle accident at $1,778,000 and accident-related injury at $40,000 (based upon a 2021 study). When a worker is engaged in an accident while driving for business purposes, generally their personal auto liability policy is tapped first. If the loss (either by claim or lawsuit) exceeds the driver’s policy limit, then then the employer’s auto liability deductible and the insurance carrier’s primary commercial policy limits are engaged. If the limits of all three coverage sources are extinguished and all damages (actual, compensatory, and exemplary) exceed insurance coverage, additional financial liability is usually sought from organizational assets.
In auto accidents with a high settlement or court judgments, exemplary (punitive) damages often have the highest financial impact on the overall award. For example, if a plaintiff’s attorney can show an employer or contracting organization knew or should have known a driver operating a vehicle on their behalf posed an increased risk due to a poor driving record, or worse, was driving with a revoked or suspended license, it can open the door to a claim of gross negligence and may dramatically increase the amount of financial award, regardless of whether the vehicle involved was company or personally owned.
Most employers with workers driving company-owned and personal vehicles for company benefit conduct pre-employment and/or pre-placement motor vehicle searches during onboarding and placement processes. While this is a good step towards mitigating organizational risk, a lot can happen after the initial search. Some companies address this risk by conducting periodic (quarterly and annual) motor vehicle checks to identify changes in license status and increases in risk behaviors. Unfortunately, periodic checks can be prohibitive both in terms of direct costs and the labor required to facilitate them, which has led to only a small fraction of organizations with driving populations utilizing the resource, despite the added risk mitigation benefits. Additionally, like pre-employment/pre-placement motor vehicle checks, periodic driver record checks still leave companies in the dark as to changes in driver behavior and license status between checks.
Fortunately, technology in driver safety has evolved to provide organizations with a third option, continuous driver monitoring services. Drivers engaged in a monitoring program are first subject to a baseline motor vehicle report in their current state of licensure. They are then added to an organization-specific pool for continuous motor vehicle monitoring. Should a change impacting their driver’s license occur (example – moving violation, driving under the influence charge, license suspension or revocation, failure to maintain liability insurance coverage, etc.), a new motor vehicle report is obtained to confirm the charge and the sponsoring company is notified. This enables the organization to take immediate action to protect the worker, company assets and the public.
Additional benefits of motor vehicle monitoring programs include reduced overall driver risk mitigation costs versus conducting periodic driver record searches. A significant cost factor in motor vehicle record searches is often the access fee levied by each state licensing agency. This cost can exponentially exceed the service fee charged by a consumer reporting agency to facilitate the report. Since, in a monitoring program, ordering a new report is generally only triggered by a status change notification, most organizations can significantly reduce the number of new reports ordered each year. Also, there can be significant cost savings in terms of labor associated with periodic motor vehicle license screening.
For organizations seeking opportunities to further minimize risk and gain greater impact on adverse driver behavior, additional services like driver training, commercial driver monitoring including monitoring of crash and inspection activity, and custom risk scoring to monitor driver safety data and align it to specific risk reduction goals are available. Thanks to continued technological advancements, organizations now have the potential for great insight into driver behavior and the ability to engage in increased protection from gross negligence claims.
Want to learn more about how AccuSourceHR’s MVRSource continuous motor vehicle monitoring products can help your organization save time, reduce labor, and minimize costs while improving overall driving risk mitigation? Contact us today at email@example.com.