How Businesses Can Limit Costs of Work-Related Crashes

By | June 19, 2018

Work-related motor vehicle crashes cost employers $56.7 billion in 2017, according to a report by a Boston-based vehicle management and reimbursement platform that offers ways employers ways to limit the costs of accidents.

The firm, Motus, estimates that about 40 percent of vehicle accidents are work-related, while 53 percent of vehicle crash injuries cause employees to miss work.

“Between medical expenses for employees and others involved in accidents, insurance increases, leave wage replacement and property damage costs, we’re now able to see the true financial impact of accidents on businesses,” said Ken Robinson, market research analyst for Motus.

Since most employees and employers track mileage for reimbursement purposes, the company believes that one way to reduce accident costs is to limit mileage to work-related trips only. According to Ady Das, vice president of product management at Motus, mileage can be tracked via GPS pings as the vehicle makes stops throughout the day, via plug-in telematics or by a mobile app that can monitor mileage on a route by route basis.

Craig Powell, CEO of Motus, said employers can implement a fixed and variable rate (FAVR) reimbursement program that accounts for how much employees drive and where they drive during work-related trips only, “thereby mitigating exposure to costs associated with off-hour accidents.”

In the FAVR program, all drivers must submit their insurance policy and vehicle information.

“If a driver does not comply with those coverage requirements, then what usually happens is that they find these drivers out of compliance and they withhold the fixed amount,” said Das.

By expanding their driver risk management approach beyond basic motor vehicle record (MVR) checks, employers can reduce the number of accidents dramatically. According to Dave Lewis, vice president of Strategy at Motus, MVRs aren’t always a good indicator of whether a person is a good driver. He offered the example of a female driver living in New York City who has a spotless MVR but has little on the road experience because she doesn’t drive much. She gets a job and is given a company car that she crashes shortly thereafter.

“She had a clean MVR but what they didn’t pick up was that she didn’t have any driving skills,” said Lewis.

Only 42.6 percent of companies currently mandate driver safety programs for employees in company-owned vehicle programs, the Motus 2018 Driver Safety Risk Report says. That number drops to just 19.5 percent for employees in mileage reimbursement programs.

Employees’ insurance costs can jump after an accident. The report claims that accidents that include damage to both a person and a vehicle can boost annual insurance rates by about 33 percent. Accidents without any injuries increase insurance annual rates by about 23 percent. That means that an accident could increase an employee’s average auto insurance costs by $350- $515 a year.

The report found that instituting individualized training and insurance verification can reduce collision rates by as much as 35 percent. Lewis recommends employers include within company policy a form that highlights the minimum insurance requirements and have employees sign it upon hire. This, in and of itself, can identify future issues the employer may have with an employee.

“It’s your first opportunity to spot if they’re going to be…a good employee at work and…if they actually purchased the right amount of insurance. Because if they haven’t, it really is an early indicator of more bad things to come,” said Lewis.

Individualized assessments, like the ones Motus offers its clients, are comprised of a computer test and a series of learning modules. The modules, which can be completed on a mobile device, take about 10-12 minutes to complete and measure how a driver reacts to risks, said Lewis.

He also recommends self-reporting, so if an employee does have driving infractions they can be addressed.

The company works with employers that manage auto fleets, as well as with employers that reimburse employees for the use of their personal vehicles. The use of fleet vehicles heightens liability risk substantially, said Lewis, since employees and their families could be involved in an off-hour crash.

About Denise Johnson

Denise Johnson is editor of claimsjournal.com. More from Denise Johnson

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