Updated 4/21/2022 with new Ohio BVM services link
Virtually every business needs cars or trucks to conduct their business. As auto accidents are the most frequent commercial insurance claim, you should also have a fleet safety policy to define expectations, set standards and have accountability for your results. This is a short recap of the needed elements.
Vehicle use
The first choice to make is, what is appropriate use of company owned vehicles? Do you allow personal use of the vehicles? If yes, then you are assuming a greater exposure to loss as the vehicle will be on the road more frequently. If you limit the usage to business use only, this can be a consideration for employees who may have been accustomed to personal use of a company car. You can make a case for either position, but the vehicle use should be clearly identified. This is not a rating point for most auto policies, but a common underwriting question.
Rules for vehicle use such as, no off road, no towing or other restrictions that you want to apply should be included in the vehicle use part of your fleet safety program.
Authorized Drivers
Who is an authorized driver? If you permit personal use of vehicles are spouses or children permitted to use the company vehicle? Your insurance company will ask for a drivers list. A best practice is to maintain a drivers list that includes full name, date of birth, license number, state of issue and expiration date. This will allow you to alert drivers whose licenses may be ready to expire. In the COVID-19 era, some states stopped sending expiration notices to drivers.
Motor Vehicle Records - MVR
The driving history is a primary point of driver reviews and qualification for insurance purposes. It should also be a point of evaluation that the business owns and performs for itself. If you rely on your insurance agent or company to run MVRs for you, you are not managing your own exposures. The insurer may run all or a sample of the drivers’ data for motor vehicle record screening. Insurance companies and agents will not provide copies of MVR reports due to privacy issues.
You should develop an MVR review standard and use that to qualify drivers. Having your own MVR standard allows you to establish expectations for behaviors and performance. It allows you to make objective decisions on driver qualification. Insurance carriers can offer sample driver qualification standards for you to use as a baseline.
MVRS should be obtained before assigning driving duties and annually thereafter. For drivers that require DOT driver files, there is an annual requirement for a driver review that must be documented.
Not having established MVR standards can expose the employer to a claim of negligent entrustment. You gave a driver with a poor record access to a vehicle and a loss occurred.
MVR Online access
There is online access to MVR data for our local states.
You can get a two-year MVR for free and a three-year MVR for a small fee.
Kentucky - https://secure.kentucky.gov/dhronline
This is a three-year record and costs $5.50
You can create an account to see your own driving record.
For employers who conduct background investigations, the MVR can be part of that process.
Driver Qualifications
For DOT regulated fleets there are medical evaluation requirements, reference checks and other driver qualification rules. Other non-regulated fleets may have experience requirements to be a qualified driver. These should be documented and communicate to your drivers.
Vehicle Maintenance and Inspection
Your policy should outline procedures for vehicle maintenance. The frequency and who will perform the services should be identified. Records of the vehicle maintenance should be maintained for each vehicle. For pool vehicles or units without a specific driver, make allowances for these vehicles to be inspected and maintained.
Company vehicles should be inspected to verify condition and maintenance. This can also identify any unreported damage that has occurred. The inspections should be documented for each vehicle. There are DOT requirements for annual vehicle inspections by certified DOT providers that must be performed.
DOT fleets also have the responsibility of performing pre-trip and post-trip inspections.
Accident Reporting
You should have a clear policy on accident reporting. Who is to be notified and when are police reports required? Accident kits with accident report templates are a valuable tool for helping a driver in this high stress time. Encourage cell phone photos of the accident scene and damage. Promptly reporting the claim to your insurance company will help the insurer manage the claim.
DOT fleets are required to maintain an accident register for all accidents that meet DOT reportability standards.
Defensive Driving
Your fleet policy should endorse the concept of defensive driving and accident avoidance as a goal for your drivers. This seems like an obvious point, but it can be important in managing aggressive driver behavior that may be reported or observed. Insurance companies and multiple government agencies have materials on defensive driving that can be used as an ongoing messaging program for your drivers.
Distracted Driving
You need a clear policy that bans texting while driving and limits cell phone use while driving. Texting is simply too dangerous to consider a safe practice. Research has shown that hand-off cell phone use is not the panacea. The level of distraction from cell phone use is the intensity or complexity of the call. The best practice is to require drivers to focus their attention on driving and not allow texting or cell phone use. There are DOT regulations to this effect for DOT regulated fleets.
Hired and Non Owned Vehicles
Reimbursing employees to use their own vehicles for business does not mean you do not need a fleet safety plan. The driver qualification, MVR standards, accident reporting, vehicle inspections, defensive driving and distracted driving polices apply regardless of vehicle ownership. Driving is part of the employee responsibility, and you have a duty to manage that activity. The last level of risk management for hired and non-owned vehicles is having the owner prove they are carrying adequate levels of automobile insurance. You require minimum limits such as $100,000/ $300,000 limits as the minimum acceptable for your firm. This insulates you from minor events that occur.
Telematics
Technology offers fleet and business owners the ability to monitor vehicle use and driver behavior with ease and precision. Telematics can identify use patterns, operating areas and driver behaviors around speed, hard maneuvering, and driver distraction. Most insurance companies offer a discount for use of these services, and many have vendors aligned with their offerings. A good fleet safety plan that includes telematics has a higher success potential than one that does not leverage technology.
The Driehaus Difference
We understand the needs for business to have policies and procedures that support their overall operations and risk management plans. Ask us for help in reviewing or developing a fleet safety plan. Call us at 513-977-6860 or contact us via our web site at www.driehausins.com