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Fleet Accident Management: What Does Your Company Do When the Worst Happens?

Headshot of a man with a blurred background By Ben Reiland June 8, 2021

Categories: Industry Trends Mobile Workforce Vehicle Reimbursement

Vehicle accidents happen. And there’s no shortage of causes. While there are prevention measures people can take, these often come far too late. Vehicle accidents are particularly common among companies with fleets. What can a company do once the accident has occurred? This post aims to answer important questions on the topic of fleet accident management.

1). Accidents

There’s been an accident. Part of the benefit of fleet vehicles is that in many cases, employees can use them for both business and personal use. This means an accident could happen at any time. When it does, your company will have to submit a claim to the insurance company. Depending on which party is found at fault, this may also result in a lawsuit. We’ll get into that more later.

2). Repairs

Depending on the damage, the company is looking at repairs or outright replacing the vehicle. At minimum, that’s going to be a couple thousand dollars. That doesn’t factor in the impact on your employee’s work output. Some roles may be able to perform some parts of their function without a vehicle. Others might as well be on vacation if they can’t drive their fleet vehicle. All you can do is hope the repair costs and time in the shop are minimal. Unfortunately, these are not factors you can account for.

3). Lawsuits

The above are common aspects of fleet accident management. Unfortunately, so are lawsuits. When a fleet vehicle is involved in an accident, the company is often the target of a lawsuit aiming to prove the driver should not have been trusted with a corporate-liable vehicle. This is known as negligent entrustment.

This risk should be enough encouragement for any company not using Motor Vehicle Record checks (MVRs) to implement them. Some companies use MVRs during the hiring process to validate people’s driving records. Other companies run checks annually or even continuously. A company that doesn’t use MVRs may have a harder time proving they consistently employ appropriate measures designed to ensure safe vehicle operators.

4). Arbitration

Many fleet accidents that result in lawsuits end in arbitration. Depending on the severity of the accident, this could be hundreds of thousands or more. That number does not include legal fees.

5). Driver Safety and Training

The company has repaired the vehicle, or replaced it. The lawsuit and resulting arbitration has been settled. This is generally when a company decides to take steps toward risk mitigation. Before the accident, it might be they figured it wouldn’t happen. The world following the accident and everything else is a little different. When companies reach this point, they look to implement MVR’s and safety training.

Training can have a serious impact on employees road safety, increasing awareness and decreasing bad behaviors like distracted driving. Not every offering is going to have a considerable impact, but the best can lower accident rates by as much as 20%. That being said, accidents can still happen. So what comes next?

6). Consider Other Options

Some companies dig their heels in when it comes to their fleet. An accident will happen, they’ll repair or replace the vehicle, face the lawsuit and look into risk mitigation options. They’ll put every driver through additional driver safety training and pull MVR’s regularly. Then another accident occurs. What went wrong?

The company pulled MVR’s and put employees through training. Risk mitigated, right? Well, with fleet vehicles, risk is ever present. Accidents happen, even after safety training and MVR’s. And, with a company-provided vehicle program, the business often pays for that. Which is why more and more companies are looking to other options.

7). Switch to FAVR

Using a Fixed and Variable Rate vehicle program, companies can reimburse employees for the business use of their personal vehicles. This offers mobile workers with the compensation that deserve while mitigating the risks of fleet vehicles. This program additionally removes the need to maintain and repair vehicles for the company.

There’s No Better Time Than Now

Fleet accident management is admittedly a nightmare. It’s an ever-present issue, with only one solution: changing vehicle programs. Luckily, there has never been a better time. As the pandemic shut down vehicle production for a time and people shifted from public transit to vehicle ownership, demand for both new and used vehicles has skyrocketed. Achieving a considerable return on the initial investment is just one of today’s benefits for switching vehicle programs. Curious to know more about the FAVR program?

Learn More Here

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