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Insurance - Managing your fleet exposures - driver qualifications

image Mark Gaskamp CSP, CRM, CIC, CPCU, ARM, ALCM Managing Director, Wortham, L.L.C., Austin, TX

AUSTIN - What is the biggest risk for your operations? A worker injury, a big liability claim, a large property loss?

 

 

 

 

 

 

    Every construction operation must deal with an exposure that creates this potential risk multiple times every single day… vehicles and drivers.  There are very few exposures that can have the financial impact of a serious vehicle accident.  Many insurance carriers have increased auto rates recently due to poor performance in this area due to increased claim frequency (largely due to distracted driving), higher litigation costs, and injury settlements.  In order to reduce liability exposures and insurance costs  it is imperative that policies and procedures be developed to address your vehicle and driving exposure.

    Every time a driver gets behind the wheel of a company owned vehicle or drives a personal vehicle on company business they are putting the organizations assets at risk.  It starts with determining who gets to drive on company business.  Failure to properly vet these individuals can lead to “negligent entrustment” should the individual involved in an accident happen to have a poor driving record.  Negligent entrustment means you “knew or should have known” that the individual you put behind the wheel of a company car or allowed to drive their personal vehicle on company business had a poor driving record and should not have been allowed to drive.  In other words, you should have run a motor vehicle check and you should have disqualified the driver after reviewing their driving history.   If negligent entrustment can be proven by the plaintiff the liability exposure and potential legal costs can increase exponentially.

    Many organizations historically have relied on their insurance company to help manage the driver qualification process.  Changes in privacy laws and definitions of credit reporting agencies have resulted in a shift in mindset in this area.  Most insurance carriers are now only willing to provide an approved drivers list or a list of those drivers that are excluded, without any explanation.  It is your obligation to figure out why there is a problem with their driving record.  Just to confirm, when the insurance carrier excludes a driver this means there is absolutely no insurance coverage should this individual be involved in an accident either in
a company vehicle or their personal
vehicle.

    From a liability standpoint, this really is a process that each organization should “own.” After all, do you really want your insurance company to completely control your fleet safety policy?   Developing a written criteria for new hires and existing drivers is the key component to any fleet safety program. This policy should align closely with what insurance carriers are looking for, but can include additional criteria such as training and probation for certain violations.

    Taking the time to develop and update your fleet safety policy on a regular basis is an excellent way to reduce the liability exposure for any organization. As an added benefit it looks really good when presenting each risk to the insurance marketplace.

    If you would like sample fleet safety policies, procedures or have other questions regarding fleet safety or other risk management issues, do not hesitate to call or drop me a note.

    Mark Gaskamp can be reached at Wortham Insurance:   512-532-1536
mark.gaskamp@worthaminsurance.com
www.worthaminsurance.com


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