Value Versus Cost

Company bosses must take fleet risks seriously, but most directors only see cost, not value, when focusing on at-work driver safety, says Chris Howell

British business is losing up to £2.7bn a year as a consequence of more than 100,000 road accidents a year involving staff driving on company business, according to the Government. But, while fleet decision-makers seem aware of the costs and the importance of putting driver safety first on their agendas, they are failing to win boardroom backing. This is because, when focusing on driver safety, most company directors see cost, not value.

Employees who drive more than 25,000 miles a year have a one in 8,000 chance of dying while behind the wheel of their company car – a risk similar to that of miners dying at coal face, according to the Royal Society for the Prevention of Accidents. Yet statistics show that around 85% of businesses running a fleet are prepared to allow their staff to get behind the wheel of a company car without any assessment of the risk involved.

A fleet risk assessment will recommend how to reduce risks and costs by at least five times the risk assessment fee. However, there are also legal, social, environmental and moral reasons for implementing a comprehensive safety strategy.

Failure to act is not an acceptable excuse if, and when, a police officer knocks on a company's door following an accident involving one of its at-work drivers. Adverse publicity in the press about a company's failure to recognise and act on its safety obligations can be very destructive. Therefore, although corporate costs are under the microscope, a quality risk management programme, including driver training if necessary, is essential.

By managing occupational road risk and putting in place a cycle of continuous road safety improvement, a company's fleet efficiency will be enhanced. Vehicle downtime and staff sickness levels will be significantly reduced, and the organisation's safety image will be boosted.

Driver training – through both practical and classroom sessions – is part of the solution to improving at-work road safety. The complete solution lies in every company, large and small, implementing a total vehicle risk management strategy. There is ample evidence that driver training run in tandem with a risk management strategy results in improved business performance, through fewer accidents, less need for investigation and paperwork, less lost time and work rescheduling, lower training costs, fewer missed orders, improved morale and reduced insurance costs.

Driver training should be targeted at higher risk drivers. They should be easy to identify, either on the basis of previous claims experience, or on the grounds of high annual mileage, or type of work undertaken. Such drivers should be given the highest priority under a driver training scheme, as that is where the greatest benefit for both the employer and employee is likely to be felt.

Fleet managers should remember that it is not only the driver profile which should be studied when drawing up a risk management strategy, but also the fleet's vehicle profile. For example, are high-risk drivers at the wheel of the most powerful vehicles?

Most accidents occur at low speed, but they can still be very costly. Bent metal costs average out at between £750-£4,500 per insurance claim. But most costs are hidden: the Health and Safety Executive has calculated that for every £1 recoverable from insurance, between £8 and £36 may be lost to the company in uninsured costs

Many fleets have decided to tackle rising insurance premiums either by buying less cover, or by self-insuring. Others have decided to carry a greater excess. Given that such costs come off a company's bottom line, and that around two-thirds of the fleet will typically be involved in an accident annually, bosses should calculate by how much company turnover would have to increase to fund the annual excess payments or the annual accident bill.

While such short-sighted methods may dodge an increased insurance premium this year, they do nothing to tackle the overall fleet risk problem. Accident and insurance costs are calculated to account for 15% of the total expense of running a company vehicle. And these costs are increasing.

Accidents imply a fleet safety problem and that in turn implies a management problem. All the evidence points to the fact that fleets that have embraced a safety culture reap benefits. Earlier this year, in a survey by Lex Vehicle Leasing, which manages 90,000 vehicles, safety was identified as the top priority by 200 fleet decision-makers running nearly 20,000 cars and vans .

Mounting pressure
The Work-related Road Safety Task Group described many road deaths as 'needless', and the business argument for fleet risk management as 'compelling' when, 17 months ago, it published its report Reducing at-work Road Traffic Incidents. As the report says: 'The effective management of at-work road risk should benefit business. Having key people unnecessarily injured and off work, or vehicles off the road cannot be in anyone's interests.'

Government concern at the number of accidents involving at-work drivers, has led to both the police and Health and Safety Executive using existing legislation to target rogue employers as well as employees who cause accidents. Legal experts believe there are around 20 pieces of legislation which could be used against at-work drivers and their employers following an accident. They range from road traffic law, to driver's hours, to vehicles being fit for their intended use.

Earlier this year a haulage company manager was jailed for four years after being convicted of manslaughter for failing to prevent his drivers working excessive hours. The case followed the death of a man who was killed when his car was hit by one of the company's drivers, who had been working for about 20 hours and had had little time for quality sleep.

Sleepiness is thought to cause around ten deaths per week on Britain's roads and around a fifth of accidents on motorways and trunk roads. It is calculated that sleep claims more lives on Britain's roads than drink-driving.

The Association Of Chief Police Officers (ACPO) has produced a `Road Death Investigation Manual` which, in the event of a fatal or serious injury, acts as a guide to police officers, who are now investigating all road deaths as if they were unlawful killings. If an accident involves an occupational driver, the police will look for evidence of why the vehicle was at the scene, the mechanical condition of the vehicle and the physical condition of the driver. Investigations will extend to the records that the company holds of the vehicle, including its maintenance and what daily or weekly checks are carried out as to roadworthiness.

If asked, a company must be able to produce accurate records of the number of hours that a driver has been on the road in a working week, and prove that its working practices are such that a driver would not be placed in a position where driving for excessive periods was a requirement.

Companies must analyse the workloads they are asking staff to undertake. A risk management strategy is equally applicable to employees who drive their own vehicles on company business. With more and more employees opting out of the traditional company car, company bosses must ensure their safety strategies cover all staff, irrespective of who owns the vehicle.

As Richard Dykes, chairman of the WRRSTG and formerly group managing director of Consignia said: "If you think safety is expensive, try counting the true cost of accidents".

Chris Howell is operations director of Risk Answers, Tel: 01344 467893, E-mail: chris@chrishowell.co.uk

Bus and coach survey
A UK bus and coach risk management survey, published in April, found that: