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Commercial
Automobile Losses Cost Your Company More Than You Think! Many commercial fleet owners/managers do not understand the total impact of commercial automobile losses on a company’s bottom line. While the direct costs of fleet losses are readily evident on loss statements furnished by the agent or carrier, the indirect costs are not evident and sometimes not considered by top management. Direct costs associated with fleet losses include bodily injury, property damage, and any allocated costs associated with handling the claim. It should be noted these costs are for liability toward other persons and property involved in the accident, and do not cover losses sustained by the company’s employees, vehicles, equipment, or property. Employee injuries would be covered under the workers compensation coverage, and damages to company vehicles would fall under the physical damage coverage. Indirect costs are those costs not mentioned above which arise out of a fleet loss and are not covered by the commercial fleet automobile liability policy. These costs include time spent investigating the accident, scheduling another driver or employee, transporting that employee or driver, providing another vehicle, loading or unloading of cargo if needed, etc. Safety experts maintain these indirect costs can run up to five times the direct costs. These will also vary by industry. To be conservative, indirect costs will be estimated at three times the direct costs in the following illustration. To determine the total impact of loss revenue, profit per load, and cost per mile, consider the following illustration:
How to Effectively Reduce Fleet Losses and Associated Costs Liberty Mutual has found that these costs can be dramatically reduced by implementing the elements of an effective fleet safety program, and ongoing vehicle training in Decision Driving™ Concepts through a process called Commentary Driving™. Liberty Mutual
conducted a study that focused on customers who had attended Liberty Decision
Driving™ Seminars during a three year period and then implemented the
above controls. The following charts depict average reductions in accidents/vehicle/year,
accident frequency¹
per 1,000,000 miles, and dollar losses² per 1,000,000 miles. ¹based on accidents
reported to Liberty Mutual
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