Don t Let Your Fleet Fleece You! The elements of an effective fleet program

Don t Let Your Fleet Fleece You! The elements of an effective fleet program

Who is on the Panel? Steve Heckle Director, Risk Management LKQ Corporation James O Dell, CPCU Senior Vice President Willis

Why Talk about a Fleet policy? Car Accidents cost $55,000,000,000 6,289,000 police reported crashes 3,2000,000 injuries 41,345 deaths annually Three workers die each day from a work related motor vehicle accidents. Auto accidents are the leading cause of work related injuries and account for 20% of all fatalities. The National Highway Traffic Safety Administration

Are you required by law to have a Fleet Program? Law does not require one for private passenger fleets Not Required for Non-owned exposures Large Trucks requiring CDL, yes DOT compliance Driver logs Drug testing etc...

Do you need a Fleet Program? Do you Own Vehicles? Do you have long term lease vehicles? Have Employees driving their own vehicles on Company business? Have employees traveling and renting cars? Yes to any of the above questions means that you should have a fleet program.

You only need a fleet program if you own or lease cars Incidental Non-owned examples: Bank deposits Driving to training events Running errands for the company Fund raising events Entertaining, dinner, golf outing

Who are the Stakeholders? Human Resources Operations Risk Management Shareholders & Owners Underwriters The size of your retention will determine the degree of interest from each stakeholder.

Best Practices For Fleet Safety Management Support and Direction Program Organization Employees Selection and Qualification Employee Training Control of Physical Hazards Accident Reporting, Recording and Review

Management Support and Direction Vehicle safety policy statement signed by current top management covering: seat belt use safe vehicle operation prohibiting the use of alcohol and controlled substances Management actively supports vehicle safety program: observation rides driver safety award presentations accident reviews, etc. Associates perceive management as supporting safety. Associates with excellent driving records recognized via: safe driving awards company newsletter articles, etc.

Program Organization Trained and qualified person responsible for program coordination and administration. Fleet safety function adequately staffed. Vehicle accident frequency and cost information is regularly provided to keep management informed of loss trends, major loss sources and how their operation compares to similar operations.

Employee Selection and Qualification Motor Vehicle Records (MVRs) reviewed initially for new drivers and annually for all drivers. MVR criteria established and used for MVR reviews. Drivers licenses checked initially for new drivers and annually for all drivers. Documented road test administered during new employee orientation. Restrictions on personal use of vehicle (spouse, children, etc.) established.

Employee Training Driving safety topics included in general meetings with associates who drive. Passenger car drivers maintain at least a two-second following distance under ideal driving conditions to avoid hit-other-in-rear accidents. Following distances are increased in poor weather or slippery driving conditions.

Control of Physical Hazards Driver checks vehicle daily before initial operation (brakes work, mirrors adjusted, etc.) Vehicles properly maintained according to manufacturers instructions. Annual documented self-inspections of vehicle by driver, manager or fleet administrator.

Accident Reporting, Recording and Review All vehicle accidents are investigated per company procedures and corrective action (training, coaching, discipline, etc.) is taken to a prevent reoccurrence. All vehicles are equipped with an accident report kit, containing: accident report forms reporting instructions disposable camera with instructions (i.e., number of pictures to be taken, what angles, etc.) Accident review committee established for reviewing accidents and determining preventability according to established criteria. Annual reviews to identify actual or potential loss sources with action plans, including adequate financial support, to correct loss sources.

What is U.S.C. 2721 et. seq? Federal law prohibiting the release and use of certain personal information from state MVRs.

Motor Vehicle Records and complying with 18 U.S.C. 18 2721 Must secure written waiver from employees. Employers, Insurers, ISO, and Self-Insured entities may access data to verify information. Consider engaging a third party firm to conduct the MVR check. MVRs - part of the background checks for prospective employees. Who has access to this information?

Consider a Global Positioning System (GPS) As a part of your Fleet Management Program Holds drivers accountable for their actions and dramatically improves driving behavior. Can manage speed, seat belt, idle time compliance that will in term reduce your casualty claims frequency. Protects the company and employee against false accusations following an accident.

ORKIN and GPS Case Study Started using GPS technology in 1998 Casualty claims volume in 1993 was over 12,000 casualty claims per year (450 million dollar company) Casualty claims volume ending in 2007 was 3861 claims (895 million dollar company) Orkin has experienced a 68% drop in claims frequency over the since 1993 while doubling the size of the company Orkin has decreased their insurance claims costs from 7% of revenue in 1993 to 2.2% of revenue in 2007

Pest Specialists Encounter with GPS Serious accident involving an 8 year old boy playing tag in the street who was hit by the Orkin truck Boy sustained serious injuries Orkin driver accused by a witness of speeding and driving recklessly GPS showed driving behavior was well under the posted speed limit GPS allowed Orkin to deny the claim and claimant s mother never pursued after seeing the GPS data

GPS Data

What are Underwriters Expecting? Written fleet program MVR checking protocol Fleet program for non-owned exposure Data on how many employees get mileage reimbursement on Expense accounts Much more awareness from Underwriters on the incidental non-owned exposure

Examples of Fleet Programs Please go to www.rims.org/handouts Presentation Sample Company Vehicle Policy Sample Company Use Auto Policy Personal Use Policy and Procedures Motor Vehicle Records A Management Tool Best Practices for Transportation Safety Speaker Bios Steve Heckle LKQ Corporation James O Dell Willis

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