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The driving concern of fleet safety.

ALTHOUGH LOSS control constitutes one of the primary functions of risk management, many risk managers may not be playing as active a role as they should in protecting their companies' fleets from loss, declares Penny Levin, President of PAL Inc. "Fleet managers are usually responsible for maintaining the company fleet, so as a result, risk managers may not get involved in fleet safety issues," she says. "However, fleet managers don't have the credibility with upper management that risk managers have. As a result, risk managers can do a lot to help coordinate safety programs and let upper management know how crucial it is for the company to maintain a safe fleet."

Speaking at RIMS 11th Annual Midwestern Regional Workshop held in Northbrook, Illinois, on October 26th, Ms. Levin says that there are a number of reasons why risk managers should regard motor vehicle safety issues as a critical concern. For example, she points out that allowing unfit employees to operate company vehicles can create significant liability problems for a firm. "If a company puts an employee behind the wheel who's unfit, and an accident occurs, then the company can be regarded as negligent, even if the person was not working at the time," she says. "And the liability for company car accidents can be astronomical. In fact, for a small company, the liability from a single crash could bankrupt the firm." Ms. Levin also mentions that although many organizations obtain their fleets from leasing companies, the company that operates the vehicle is generally the one that will be regarded as liable in the case of an accident.

Measures for Safety

SINCE STATISTICS demonstrate that 37 percent of all occupational deaths are motor vehicle-related, the Occupational Safety and Health Administration (OSHA) is taking a proactive role in promoting safety plans for motor vehicle use in the workplace. "At present, OSHA recommends that companies adopt driver awareness programs to reduce the likelihood of work-related accidents." Ms. Levin reports that although OSHA does not mandate these programs now, their position on this issue could change in the future. "OSHA will remain committed to the vehicular safety issue," she says, "It's only a matter of time before they take measures to make safety programs mandatory."

Training Programs

BECAUSE OF THESE potential hazards, risk managers should take proactive steps to minimize the likelihood of fleet accidents. According to Ms. Levin, the surest way to accomplish this is to create and implement effective and well-organized safety training programs. "Ninety percent of all car crashes are due to human error, so safety programs are very important for companies that have a significant number of employees on the road."

Ms. Levin says that training sessions can be conducted in an in-class format, or with actual hands-on training. "Hands-on training is very expensive, so it should be used only for high risk drivers," she says. Other approaches include audiotape and videotape training series, as well as using newsletters to educate employees about the importance of safe driving. "No matter what program you use, it should be flexible, and it shouldn't show favoritism for certain types of employees," she says. "For example, executives who use company vehicles have the same level of responsibility that lower-level employees have for the safe operation of company vehicles."

Ms. Levin also emphasizes that risk and fleet managers should ensure that employees accept the programs. "To be effective, employees must like the programs and believe that they will work," she declares. "And, if the programs are well constructed and well received, they can be very effective; research shows that something as small as a newsletter program or one or two safety programs can reduce company vehicle accidents by as much as 10 percent."

Funding the Programs

HOWEVER, DUE TO the downsizing trend prevalent at so many organizations, obtaining funding for these programs can be difficult. "Often, many companies have had to be creative to find funding for safety programs, says Ms. Levin. "Generally, though, risk managers may find that they can obtain this funding through the use of deductibles, or adding the costs of the programs into the acquisition costs for new vehicles or into yearly departmental cost-of-living increases."

Ms. Levin suggests that companies that are considering developing a safety program - or improving an existing one - contact the National Association of Fleet Administrators (NAFA), which is based in Iselin, New Jersey. "NAFA is a good resource for risk managers who want to develop effective safety programs for their companies' fleets," she declares.

In addition, the Clean Air Act will also have an impact on some organizations' fleets. "One aim of the act, called Employee Trip Reduction (ETR), is designed to make employers in certain high-pollution areas reduce their employees' driving through carpooling and other measures," she says. "Although ETR will affect only companies with 100 or more employees who work at a single facility, the plan aims to reduce employee driving by 25 percent." As for fleets, Ms. Levin says that the plan will primarily affect organizations that have large fleets operating from a single workplace; however, other firms may have to devise plans to use some of their fleet vehicles for car-pooling.

In addition, Ms. Levin says that companies must notify the government as to how they will effect these reductions by 1994, although the ETR plan itself will not go into effect until 1996. "Companies will have to take this issue seriously because the fines for noncompliance are exorbitant," she says. "In fact, a first infraction will cost an employer $50,000, with an additional $10,000 for every day that the company doesn't comply with the rule."

Considering the enormous liabilities that companies are exposed to if their employees become involved in accidents, Ms. Levin stresses that risk managers should do all they can to enhance vehicular safety. "It is very important to maintain a safe fleet, because accidents claim a lot of lives; government statistics show that in 1991, 44,000 people died in vehicle-related accidents." And by creating an environment favorable to the reduction of fleet accidents, risk managers can help their companies protect one of their most important assets - their employees.
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Author:Christine, Brian
Publication:Risk Management
Date:Dec 1, 1992
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