March 30, 2006
Liability concerns relating to business vehicles have heightened significantly during the past ten years, according to Runzheimer International’s Total Employee Mobility Benchmarking Survey. This survey, which includes participation of executive teams of leading organizations across all industries, examines the primary components of employee mobility including business driving, employee travel, relocation, international assignments, corporate aircraft and mobile/home offices. When survey results relating to business vehicles are compared to results from Runzheimer’s 1995 Survey and Analysis of the Financial Treatment of Business Vehicles, a substantial rise in business vehicle liability concerns is evident.
Forty percent of respondents in Runzheimer’s Total Employee Mobility Benchmarking Survey indicate they are concerned with liability relating to business vehicles. In comparison, a mere 17% of respondents in Runzheimer’s 1995 survey cited liability as a concern. These results are not surprising given current statistics relating to the frequency and cost of accidents as well as the increasing litigious nature of today’s business environment.
The Frequency and Cost of Accidents
According to National Safety Council research, one death is caused by a motor vehicle crash every 11 minutes, and a disabling injury occurs every 13 seconds. Not surprisingly, the greatest number of work-related fatalities result from traffic accidents. Despite automotive safety innovations which have resulted in an overall decline in the seriousness of auto accident injuries in recent years, the cost of accidents remains high due to the increased cost of medical care.
On average, one non-fatal, disabling accident can cost a company $39,900(1). In addition, industry experts estimate that the indirect costs of each accident range from two to five times the direct cost. And while accidents - and related liability claims - increase the cost of insurance, they also impact the amount of insurance that businesses must buy to protect themselves against lawsuits.
The Impact of Driver Safety Programs
There is good news, however, for companies with driver safety programs. According to Dave Friedlen, Runzheimer's Director of New Product Development, Business Vehicle Services, “When establishing pricing, underwriters evaluate both the actual incurred losses as well as the value that safety programs and procedures bring to the organization. To protect against negligent entrustment issues, Motor Vehicle Record (MVR) checks, driver safety training, and a business vehicle policy program should be a part of normal business operations.”
“A comprehensive driver safety program will result in multiple benefits to a business, its employees, and on the company’s bottom line,” continues Friedlen. “Liability and negligent entrustment exposure and related legal fees can be minimized substantially. As the quality of an organization’s driver population improves, the company can realize tangible cost savings in insurance premiums, medical expenses, wage losses, and workers’ compensation claims. Lost time, training, and productivity ratios can also be improved dramatically.”
About Runzheimer International
Founded in 1933, Runzheimer International serves 60 percent of the Fortune 500. Recognized for providing innovative solutions relating to employee mobility, Runzheimer is a global leader in nontaxable employee-provided business vehicle reimbursement programs, employee compensation and relocation, and travel management.
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For more information, contact Luella Dooley at Runzheimer International, Runzheimer Park, Rochester, Wisconsin 53167, (262)971-2277, ljd@runzheimer.com, www.runzheimer.com.
Source: (1) National Safety Council.
