Fleet Managers ‘Shocked’ By Real Cost Of Road Accidents

Representatives from some of the country’s biggest transport companies were recently invited to the Business Customer Advisory Group (BCAG), hosted by IAM RoadSmart, to demonstrate the astronomical costs an organisation can incur in road accident situations.

It has previously been reported that back in 2013, 1,731 people lost their lives in traffic crashes with one-third of all crashes involving people on a business-related journey.

The direct costs of an accident are normally clear and are usually insurable by a business. However, the shock for fleet managers arises when indirect costs start to appear, and these can include the following:

• Time away from the job not covered by workers' compensation insurance.
   
• Payment of other workers who are not injured, for example those who stopped work to look after or help the injured worker and those who require output from the injured in order to complete their tasks.
   
• The cost of damage to materials or equipment involved in the accident.
   
• The cost of overtime imposed by the accident (lost production, additional supervision, and additional heat, light, etc.).
   
• The cost of wages paid to the supervisor for time spent on activities related to the accident. This includes caring for the injured, investigating the accident, and supervising the activities necessary to resume the operation of business. All of these activities will disrupt the supervisor's productivity.
   
• Costs associated with instructing, training, and repositioning employees in order to resume production. In some cases, it might even be necessary to hire a replacement with all the associated hiring costs.
   
• Medical costs paid by the employer that are not covered by the insurance. This may include treatment facilities, personnel, equipment and supplies.
   
• Cost of managers and clerical personnel investigating and processing claim forms and related paperwork, telephone calls, interviews, etc.
   
• Wage costs due to decreased productivity once the injured employee returns to work. This is due to restricted movement or nervousness/cautiousness on the part of the injured employee and time spent discussing the accident with other employees etc.
   
• Costs brought about from any enforcement action following the accident such as prosecution fines and costs of imposed remedial works.

(Information and data provided by: http://www.preston.gov.uk/)

Lesley Upham, commercial director of IAM RoadSmart, told Fleet News: “The true cost of a crash was a revelation to everyone at the meeting.

"A crash is not just about vehicle damage – it can affect company reputation and at worst result in a fatality and a corporate manslaughter fine.

“The impact on profits is far greater than many businesses might imagine.

"As the roads get more crowded and the pressures on employees increase, the commercial sector knows it cannot afford to bury its head in the sand and is looking for targeted, preventative intercessions.”

Given the potential for gigantic costs to businesses when accidents occur, it has never been more important for management to keep a close eye on how their vehicles are being driven.

There has never been a better time to invest in driver training. At the end of the day, whilst out on the road, there’s a good chance that your drivers will meet just about every kind of road situation conceivable from the congested city centre with vehicles parked on both sides of the road, to tight country roads with troublesome bends.

Implementing a telematics system, for example, helps to relay information on driver performance, providing management with the confidence to give feedback to drivers. The data provided helps drill down into your drivers’ journey and identify certain behaviours such as harsh braking.

You’re also able to run reports, implement driver scorecards and set performance KPI’s. Accepting damage of some sort is inevitable, but those who adopt a vigorous risk management strategy - that includes making best use of data – usually see incidents fall.

The past few years have seen a rapid increase of video clips that show poor driver behaviour by road users and the damning situations they can lead to. In-cab cameras help protect against insurance fraud via so-called ‘crash for cash’ scams, whilst also proving who is on the right (or wrong) side of the law.

Given the stress high cost accidents normally cause, vehicle cameras help protect your drivers and business better. Installing cameras that can record the road in front of, alongside, and behind the vehicle can solve disputes quickly.

Some can also record the interior of the vehicle, including driving style and, in the case of a collision, impact force. Since the price of installing this technology has dropped,  the economic case for fitting cameras across a fleet has been reinforced.