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By NANCY BENDICKSON, a senior consultant with Aon Global Risk Consulting. DAN REYNOLDS contributed to this piece. He is senior editor at Risk & Insurance®

Editor's note: This article was adapted from a white paper published last month by Nancy Bendickson, a senior consultant with Aon Global Risk Consulting. It includes comments from a recent interview by Risk & Insurance® Senior Editor Dan Reynolds with Ms. Bendickson.

Motor vehicle crashes are the leading cause of death in the U.S. workplace and contribute substantially to the road fatality burden in other industrialized nations.

Of approximately 5,700 workplace fatalities in the United States reported annually by the Bureau of Labor Statistics, 35 percent are associated with motor vehicles. During the period of 2001-2005, on average:

--1,394 workers died each year from crashes on public highways.

--335 workers died each year in crashes that occurred off the highway or on industrial premises.

--369 pedestrian workers died each year as a result of being struck by a motor vehicle.

Since the early 1990s, annual totals have remained static, with increases in the number of fatalities on public roadways offsetting decreases in the number of fatalities off public roadways. In the United States, the number of workers who die in motor vehicle crashes is small compared with the total number of roadway fatalities, contributing slightly greater than 3 percent of the total according to the Bureau of Labor Statistics.

However, such issues as driver distraction and an increasing use of employee-owned vehicles are increasing concerns.

"I think proactive companies are looking at what's the age of the vehicle that you're going to be driving," Bendickson said.

Bendickson added that, as she and other researchers continue to gather data on driver distraction due to electronic devices, the number of accidents attributable to electronic distraction are sure to increase.

In the EU, road traffic and transport accidents at work account for far higher proportions of total roadway fatalities; 41 percent in 1999 according to the European Commission. That's because, blessed with excellent public transportation systems, many European commuters use trains or buses, leaving a higher percentage of company-owned vehicles on the road, Bendickson said.

"I think there's less people that own vehicles that are commuting back and forth to work," Bendickson said.

Crash experience for Australia is similar, with nearly half of all workplace fatalities between 1989 and 1992 associated with work. Data for Australia differs from those reported for the EU or the United States in that work-related crashes include those that occur during commuting to work in addition to driving during the work day.

In the United Kingdom, one-fourth of all vehicle miles traveled were estimated to be for work purposes (excluding commuting). One source estimated that one-third of all "company cars" in the U.K. are involved in a crash each year, and that crash rates for persons driving for work are 30 percent to 40 percent higher than for private motorists, according to the United Kingdom Department of Transportation.

Among countries with the best occupational road safety programs, Australia, the United Kingdom, the United States and New Zealand stand out.

"In order for these countries to be successful they needed the input of the government to kind of start giving them the nudge and the push, but you also had to have the cooperation of the private sector," Bendickson said.

WORLD-CLASS SYSTEMS

At their best, they involve integrating fleet safety within corporate environment health and safety management systems and establishing global fleet safety standards for the corporation. Some examples of corporate safety initiatives for global fleet safety/road safety include:

Driving-related accidents are the single largest cause of fatalities at The Hague, Netherlands-based Shell. The main objective of companywide road safety standards is to reduce and ultimately eliminate the number of serious road traffic incidents and fatalities.

Shell formalized and strengthened their existing requirements into mandatory companywide road safety standards in 2007. These apply to all company staff or contractors driving on Shell business. The standards include requirements to:

--Wear seat belts by all vehicle occupants at all times

--Make no use of mobile phones while driving

--Attend accredited defensive driving courses (for professional drivers)

--Fit vehicle monitoring and data recording systems

--Create journey plans for high risk routes

--Drive only when rested and alert

--Not exceed prescribed driving and duty hours

--Follow set guidelines for keeping vehicles well maintained

In 2002, Creve Coeur, Mo.-based Monsanto established a vehicle safety program to address road safety. Since that time, every Monsanto employee completes a driver training module. Employees who spend much of their time driving also get behind-the-wheel training. The program includes numerous programs and standards to create management buy-in.

The goal of the vehicle safety program was to create a company culture that values vehicle safety and recognition for those who help achieve goals. This includes vehicle safety as a part of all employees' jobs, creating shared responsibility for vehicle safety, setting vehicle safety goals and milestones for each organization, and reviewing safety progress on a quarterly basis and taking action on fleet issues.

"HIDDEN OR GRAY" FLEET

In the United States, Aon researchers see the trend toward greater use of employee-owned vehicles being used for company business. Employee-owned vehicle exposure has been called the "hidden or gray" fleet. The costs associated with maintaining a company-owned fleet have increased, and many organizations do not want to be in the business of managing company-owned vehicles. Organizations must realize that, even though the vehicle is not owned by the company, vehicle operations can still present a liability exposure to the organization.

When crashes occur, the employee's automobile liability policy offers the first line of coverage. The limits of liability on most personal automobile insurance policies are $300,000 or less. If damages exceed this level, then the organization's policy would be involved.

The perception by many organizations is that establishing driver-selection standards for business travelers will be too hard to manage. However, this "hidden fleet" risk is being managed by defining routine drivers and establishing safety processes similar to those for company vehicle operators.

COSTS

It's important to determine how much vehicle crashes are affecting the financial performance of companies. Typical measures of fleet safety include: number of collisions per year, collision frequency per million miles, average direct costs per collision, overall direct costs of all collisions, estimating indirect costs for collisions and dollar sales required to compensate for collision costs. Estimates for indirect costs of collisions are at a minimum of two to eight times the direct costs.

Motor vehicle crashes cost employers $60 billion annually in medical care, legal expenses, property damage and lost productivity. Penalties and fines for failure to comply with Federal Motor Carrier Safety Administration regulations vary by regulation and whether or not the violation is acute or critical.

Occupational driving presents risks to associates, customers and the general public. Driving is one of the most dangerous job tasks for associates. These risks involve costs to the company's reputation, financial results and ability to operate a commercial vehicle. Fleet risk exposures can be managed by developing safety management processes that include:

--Accountability and management policies

--Systems to manage the vehicle, the driver, the journey and data

A world class fleet safety system involves integrating fleet safety processes within corporate environment health and safety management infrastructures and establishing global fleet safety standards for the corporation.

May 1, 2010

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