Over the past several years, a few trends in driving, auto accidents and commercial auto insurance have raised serious concerns for employers and insurers. Statistics and news reports are depicting a troubling increase in auto accidents and distracted driving, and market trends point to a hardening market for commercial auto insurance. That means coverage is becoming less available to businesses that need it, and those that secure it will experience higher premiums. Considering these conditions, it is clear businesses have an imperative need to take immediate and unequivocal measures to improve employees’ driving behavior.
NATIONAL DRIVING PROBLEM. Americans are driving more and getting into more accidents. In 2016, traffic deaths increased to 40,200, according to the National Safety Council. That makes 2016 the first since 2007 when more than 40,000 Americans died in motor vehicle crashes.
In the U.S. workplace, motor vehicle crashes continue to be a leading cause of death, despite overall gains in workplace safety. At the same time, the costs associated with auto insurance claims have increased due to larger court settlements, higher vehicle repair costs, more persistent injuries and increased medical costs. Claims related to auto accidents can be some of the most expensive workers’ compensation claims.
But why have deadly accidents persisted despite public awareness, worker safety gains, seatbelt usage and advanced safety features? Researchers and policymakers point to a few trends behind accidents, including that more people today are driving, higher bills related to medical expenses and auto repairs and distracted driving.
WHAT IS DISTRACTED DRIVING? Though there is a great deal of public discourse around distracted driving, many people do not understand what that phrase means. Distracted driving is any situation in which the driver is not attending to the operation of the vehicle. This takes three general forms:
- Cognitive distraction: An activity that takes the driver’s mind off driving, such as talking or daydreaming.
- Visual distraction: When the driver averts his or her eyes from the road, perhaps to read a text message or look at a passenger.
- Manual distraction: An activity that requires the driver to remove his or her hands from the wheel, such as eating or programming an address into a navigation system.
Some activities are uniquely dangerous because they combine all forms of distraction. Consider reading a text message. You must pick up your phone (a manual task), read the message (visual) and comprehend its meaning (cognitive). Some research suggests that a driver’s reaction time is delayed while engaging in these activities. Perhaps more frightening is the National Highway Traffic Safety Administration’s estimate that at any given time during a day, 660,000 drivers are talking or texting on their cell phones while driving.
We also can understand distracted driving as either a decision or an unintended action. Many drivers make these decisions and unintended actions repeatedly without consequence, leading them to develop a sense that there are few repercussions for their behavior. But the potential consequences of distraction and unsafe driving are devastating for the people involved and the businesses behind the vehicles.
CONSEQUENCES FOR EMPLOYERS. The impact of one claim reverberates throughout all aspects of a business. Let’s take the example of an auto accident claim in which someone is seriously injured. The employer’s auto insurance pays out $1 million to cover legal fees, bodily injury claims and repair costs for the other party’s vehicle. Not only must company leaders absorb the deductible and purchase another truck, but without a vehicle, employees cannot respond to new business. Company leadership and the employee involved lose productivity due to months (or even years) spent in litigation. After the claim is settled, the company may be unable to secure standard commercial auto insurance coverage again; if they do, they will pay higher insurance premiums for several years, as this million-dollar claim sits on their loss experience history.
For many business leaders, the most troubling consequence of a severe accident involving one of their drivers is the damage to their reputation, which may begin when other drivers see the branded and broken truck on the side of the road. This is compounded by regional news coverage of the wreck; as the claim moves to the courts, it persists as a local news story. Potential and current customers may perceive the company as unsafe, spoiling its good name. Every story eventually exits the news cycle, yet it remains easily accessible on search engines. In search results, potential customers may discover a story about an accident alongside a company’s contact information.
These reputational and financial consequences are carried by company owners and managers. Legally, this is due to the concept of vicarious liability. An employer can be held liable for the employee’s actions on the road or even for failing to have appropriate safe driver policies. If a manager is found to have exercised poor driver selection or failed to enforce safe driving policies, the company may be held liable for negligently entrusting an employee with the potentially dangerous task of operating a vehicle.
With the consequences of a severe auto accident weighing on a company for years, employers should hear a clear call to action: do everything you can to ensure safe employee driving practices. You will never wonder if you could have done more — even if your company experiences a serious loss.
STEPS TOWARD SAFE DRIVING. Historically, companies with strict policies and procedures that are evenly enforced and have management’s full involvement have a better loss experience. In particular, policies and procedures that make a difference include hiring, driver practices, management oversight and loss reporting.
Someone’s past driving record is the best indicator of future driving performance. Hiring managers should consider the applicant’s history of moving violations and accidents and keep an eye out for red flags such as a large number of points on their license or recent citations for driving while intoxicated or driving under the influence (DWI or DUI). Each company must have policies around what an acceptable driving record looks like, such as no speeding tickets, accidents or DUIs in the past seven years. Whatever the guidelines necessary for the position, each hiring manager must be familiar with and follow them in every case. Also consider the applicant’s skill, experience and physical condition. These parameters can be observed through road tests, which allows hiring managers to evaluate safe driving behaviors such as wearing a seatbelt, adjusting mirrors, coming to a complete stop and maintaining an appropriate and consistent speed.
Employers should provide employees with concise guidelines for safe, distraction-free driving. This written policy prohibits specific distractions, particularly making phone calls, texting, eating, smoking and grooming. The policy may include desirable alternative behaviors, like pulling over at the nearest rest stop to make a phone call. It can specify consequences for failing to comply, disciplinary procedures and how consequences may escalate after multiple violations. Before a company implements a safe driving policy, it should be reviewed by a lawyer and upper management. No policy is effective without enforcement. We recommend managers accompany employee drivers for ride-alongs or road tests twice a year. This allows managers to evaluate the efficacy and enforcement of the policies and procedures they have developed.
The roadworthiness of the vehicle is an important aspect of safe driving. All businesses should consider a vehicle review system and preventative maintenance program. Include not only the manufacturer’s recommended maintenance schedule, but also employee reports. Employees could be asked to submit a monthly report on the vehicle, from how worn the brakes feel to observable alignment issues. Any problems should be addressed immediately, before that vehicle hits the road. Maintenance can be your best defense after an accident — if you have documented it. Companies should maintain documentation of any preventative safety measures, policies and procedures intended to create safer drivers. This helps defend against claims of negligent management practices.
Employees should be trained in post-accident procedures, including documenting the crash with pictures, who to call and what to say. Post-accident loss control procedures are supported by an accident kit, which should be included in each company vehicle. This “kit” can be as simple as an accident form to fill out about the conditions of an accident. It can ask the employee questions critical for filing a claim, such as the direction they were traveling, weather conditions, what traffic signals were involved and whether or not those signals were missed. Rather than waiting a week, during which key details may become fuzzy memories, encourage employees to act quickly to document the accident. We recommend the employee call the police, even for fender benders. When communicating with police and any other parties involved in an accident, employees should not admit or imply their fault, as this can complicate claims handling.
FINAL THOUGHTS. No amount of experience can replace safety precautions. Accidents can always happen, and we cannot expect accident rates to decline significantly in the near future. Establishing safe driving policies, procedures and management practices does more than protect employees and other drivers; these practices support the longevity of the entire business. When your company’s vehicle is driving down the road, it looks like there’s just one driver behind the wheel. Yet, they carry with them the entire company’s reputation and financial well-being.