Commercial Auto Insurance - Tips for Savings

 Whether a company has a few service vans or a larger fleet of vehicles, good company policy and procedures, coupled with safe driving, can help control commercial auto costs.  Following are some recommendations:

Consistent support for safety is critical.  Management should take every opportunity to speak about the importance of safety.  However, their actions and decisions must underscore that commitment.  Written policies should detail expectations, responsibilities and consequences.  Safety should be a vital component of all company policies, rather than be limited to a few guidelines.

Hire the best drivers and constantly (re)train them.  Set standards for selecting drivers and keep to them diligently.  Not surprisingly those drivers with no (or very few) moving violations in the past three years are far less likely to be involved in accidents.  Companies may need to get motor vehicle records from multiple states where a potential driver may have worked to get a clear picture.  Even after a driver is hired, periodic checks should be included in annual reviews.  Written and in-vehicle road tests may also be used to verify whether a potential driver is qualified to drive company vehicles along typical routes under a variety of conditions.

Protect your drivers (and passengers) with the right equipment.  When buying vehicles, make sure they have the best safety equipment – anti-lock brakes, air bags, traction and stability control systems – available.  After the purchase, make sure the vehicle is maintained according to the manufacturer’s specifications.  Remind the drivers to inspect the vehicle before they leave, and reporting/resolving any concerns.  If personal vehicles are being used for business, have a manager’s written permission before its use.  Managers may also inspect the vehicle to verify it meets safety and maintenance standards.

Know what happened in event of an accident.  Despite the best precautions, accidents can happen.  It is vitally important to know exactly what happened, who was injured, and the extent of the damage.  Good documentation must be fast and detailed.  Digital photos and video comments from witnesses can manage the financial impact.  The intention is not to place blame, but rather to learn from the event and control the accident’s costs.  In addition, review of the accident may be able to prevent similar occurrences in the future.  Finally, make sure to report the accident to the insurer promptly.

Choose technologies that help manage the fleet.  While a lot of options are available, from in-vehicle cameras to speed monitors and GPS tracking, not everything may be useful for every company or every vehicle.  Analyze the data collected from whatever device is installed to address and improve driver performance.  Not only will this save lives, but it will deliver a return on the investment and possibly reduce or prevent future legal claims.

Improving safety not only protects drivers and the public, but it saves money.

By commercial auto insurance experts for Liberty Mutual, as reported in Insurance Journal, July 6, 2009 issue, pp. N15-N16.