Risk management: Hands up who’s heard of these safety guidelines

by Andy Price, practice leader, motor fleet, Zurich Risk Engineering

In September 2003 the Health and Safety Executive/Department for Transport ‘Driving at work – managing work-related road safety’ guidelines were published.

There were high hopes that this would raise awareness of the issues in all organisations and prompt them into managing the risks their employees faced on the road.

Has this been achieved in the ensuing five years?

I think it has been a qualified success, as most people with responsibility for managing work-related road safety are aware of its existence, if not its content, but there are still a significant number of people with driver safety responsibilities who’ve never heard of it.

The biggest issue, however, still seems to be the awareness of directors and senior managers in any organisation, as it is still relatively rare to find a board with a clear understanding of their duty of care responsibilities towards employees who drive on behalf of the organisation.

If we compare this to the recent changes in corporate manslaughter legislation, which is well known by most board members, we can see that the 2003 guidelines could have been a lot more effective.

Had the guidelines been an Approved Code of Practice (ACOP), more board members would be aware of them and more organisations would be managing their work-related road risks.

It is still possible for the government to initiate this and after five years it is probably time to relaunch this initiative.

An ACOP, coupled with the corporate manslaughter legislation, would prompt most boards into action and fleet managers would get the management support they have been seeking.

Legislation: Accident reporting deadlines difficult to enforce

by Denny Payton, Partner Corclaim, Harvey Ingram LLP

From October 2009, fleet managers and their insurers will have just 15 days to make a decision on fault in traffic accidents.

These new time limits will create huge challenges for fleet managers and insurers.

In our experience company car drivers are often slow to report incidents and are even slower to complete claim forms despite the majority of fleets having good, clear policies on accident reporting.

HGV drivers can be even worse, particularly when the incidents are minor.

Many commentators believe that the 15-day timescale is wholly unrealistic as it takes time to get information together, particularly in large organisations.

However, if accident notification procedures are not streamlined to meet these challenging timescales, companies will face interesting conversations with their insurers over late notifications, refusal of indemnity and increased premiums resulting from a higher claims spend.

The rules were designed to significantly cut costs in straightforward accident claims and provide a speedier determination of fault.

However, if the industry cannot deal with the new timescales, they may well have the opposite effect.

To avoid costly and unnecessary admissions of liability, now is the time for companies to review reporting procedures.

A penalty scheme, for example, works for many fleets and will encourage early driver notification, particularly if the penalty is refundable.

These are tough limits so gear up now and companies will reap the rewards, bearing in mind that the process will work in the company’s favour in non- fault accidents.

Insurance: Keeping track of third-party insurance costs

by Don Moore, vice-president of sales, Enterprise Rent-A-Car.

Most fleets have processes to manage their own drivers when they are involved in accidents, handling the vehicle repair and a replacement vehicle for the employee. However, far fewer have something in place to manage third parties.

If a fleet driver is at fault for an accident during an at-work journey, that fleet’s insurer is liable for the costs incurred by the other driver (the third party) – which often include a courtesy car as well as any repair costs.

However, few insurers capture these third-party claims and manage that other driver’s repair and vehicle hire.

As a result, these claimants often end up in hire cars from other sources, such as credit hire firms.

The at-fault insurer is going to foot the bill, so there’s no incentive to shorten the repair time and get the third party back into his or her own car sooner rather than later – in fact, quite the reverse.

However, third-party claims costs are rocketing as a result. Insurers are feeling the pinch and passing it on in the form of higher premiums.

It’s worse if fleets self-insure, because they face that increase directly; if third party costs go up, it’s straight out of their pocket.

If fleets want to keep down premiums, they need to ensure their insurer has a system in place so it can manage any third-party claims itself. If a fleet self-insures, it must have some way to get hold of those claimants before someone else does.

And finally, where fleet drivers are the ‘not-at-fault third party’, fleet managers shouldn’t put them into the first free courtesy car that comes available.

It might not cost them anything now, but it’ll cost them in the future.