Top tips for fleet risk management programmes

If you read nothing else, read this…

• Reducing fleet risk can reduce operating costs, improve fuel efficiency and cut insurance claims.
• Employers need to check employees’ driving licences regularly.
• Telematics technology can be used to monitor driver behaviour, including speed, distance and unsafe manoeuvres.

 

Case study: Osborne cuts fleet insurance costs

Construction company Osborne reduced the cost of its insurance claims after adopting a new strategy to address fleet risk.

Since the firm’s new risk management programme began in 2010, it has reduced the number of insurance claims from 295 to 256 during the 12 months ending December 2011 and has cut its average cost of at-fault insurance claims from £867 per claim in 2009 to £830 in 2011.

The success of its fleet management programme, provided by the Fleet Support Group, results from Osborne identifying drivers at risk of accident and intervening with training.

Central to the programme is an online management system that requires staff to carry a company-branded permit to drive on business, and keeps a day-to-day record of how they behave behind the wheel.

The system has helped Osborne to identify and resolve a number of issues, such as cash-for-car drivers not having insurance cover for business use, employees who were close to reaching 12 points on their licence and one employee who was banned from driving on a technicality.

Paul McCulloch, group supply chain manager at Osborne, says: “The processes and information provided are invaluable in raising the profile of road safety, and are helping us to manage our responsibility to all employees.”

Osborne operates a fleet of 468 company cars and vans and has a further 366 grey fleet drivers.

 

A fleet risk management programme can reduce costs for employers and support their duty of care to staff, says Nicola Sullivan

Employers need to take a number of factors into account when creating a fleet risk management programme. First, they need to recognise that adopting such a programme is likely to require a culture change across the business because it will challenge how staff drive.

But Geoffrey Bray, chairman of Fleet Support Group, says this issue can be overcome by employees at the top of the organisation supporting the strategy. “There has to be endorsement from the very top,” he says. “The number one person in the business has to say ‘this is what we are going to do’.”

Once this buy-in is achieved, employers should refer to the Health and Safety Executive’s guide Driving at work: managing work-related road safety. Published in September 2011, the guide outlines employers’ legal responsibilities and provides information on how to manage road safety and the benefits of doing so, as well as advice on assessing and evaluating road risk.

Employers also need to be aware of the Corporate Manslaughter and Corporate Homicide Act 2007, which came into force on 6 April 2008. Under the act, employers whose gross corporate failures in health and safety lead to the death of an employee face prosecution for manslaughter and an unlimited fine.

Any robust risk management strategy will seek to mitigate risks associated with employees’ driving. This can be achieved by measuring and monitoring how staff behave behind the wheel. Bray adds: “An employer needs to get into the mind of the driver and say ‘we are going to change the way you do all of this and we are going do it by measuring your performance continuously’.”

Telematics technology

Telematics technology can be used to monitor employees’ driving behaviour, including their speed, distance travelled and any unsafe manoeuvres they perform. Bray says: “Most standard telematic devices will pick up fairly normal measurements, such as the speed at which someone is driving. The technology will tell an employer whether the driver is speeding in a particular area. It will also record evidence of harsh braking or unsafe manoeuvres, such as if the vehicle swerves or overtakes too quickly, so it is actually unsafe when it is being driven. It will also track when the car is being used.”

Employers can store the data from the telematics system on a central database and use it to build a profile of each employee driver. This can help employers identify behaviour that requires intervention, such as driver training, which can be offered in the form of e-learning and online assessments or onthe-road refresher courses. Driver training encourages safer driving, as well as teaching staff how best to reduce wear and tear on their car and how to maximise fuel efficiency.

Peter Lambert, fleet sales director at Kwik Fit, says: “Driver training not only reduces the risk of accidents, it also reduces the cost of operating a car.”

Lambert says drivers also have a key role to play in the operation and maintenance of a company car, and need to be aware they have a responsibility to check, for example, tyre pressure, tread depth, oil and water.

The final key aspect of a robust risk management programme is a regular review of employees’ driving licences. In the event of an accident, an employer’s insurance policy may be invalidated if the driver concerned has an out-of-date licence or one that contains an excessive number of penalty points. Lambert says: “Once a year or every six months, the employer should check that all its employee drivers have a valid driver’s licence.”

Checking drivers’ licences

Jason Francis, managing director at Jaama, adds: “Licence checking is the Achilles’ heel for many fleets. The licences of all staff driving on business should be validated and any endorsements put on file, whether they drive company cars or their own.”

Employers should also consider policies on mobile phone usage and the length of time drivers spend on the road.

The potential cost of creating a risk management programme should not deter employers. Bray says addressing fleet risk can actually save employers money in various ways. “I would argue that for every £1 an employer invests, it will get £3 in return. This is because it will have lower maintenance costs, fewer crashes, and the car will be kept in better condition, so will have a longer life.”

Further savings can be made if a programme reduces the distances staff drive by encouraging them to plan their route better or make use of video conferencing.

Rob Ingram, director of business development at Enterprise Rent-A-Car, says: “If [the employer] can reduce the distance travelled, it is good from the duty-of-care aspect and good for the bottom line because they are not spending as much. For a 250-mile round trip, a lot of [organisations] would reimburse a driver £100.”

So, addressing fleet risk not only means business drivers are safer on the road, it can also cut operating costs and help employers show they have staff welfare at heart.

 

Health and safety guidelines

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Key points outlines in the Health and Safety Executive’s guide Driving at work: managing work-related road safety

  • The Health and Safety at Work Act requires employers to ensure, so far as is reasonably practical, the health and safety of all employees while at work.
  • Under the Management of Health and Safety at Work Regulations 1999, employers need to carry out an assessment of the risks to the health and safety of staff.
  • Managing work-related road safety allows employers to better control costs related to vehicle wear and tear, fuel, insurance premiums, legal fees and claims.
  • Employers need to establish whether their company car policy actively encourages employees to drive rather than consider other forms of transport.
  • When evaluating risks, employers should focus on the driver, the car and the journey.

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