What Should a Fleet Safety Program Include Before a Commercial Auto Renewal?

Why Fleet Safety Becomes a Renewal Issue

For businesses with a handful of vehicles, commercial auto can sometimes be handled largely as a vehicle-and-driver scheduling exercise. That changes as a fleet grows.

A company with dozens of vehicles, multiple locations, field supervisors, delivery routes, service technicians, sales drivers, or employees taking vehicles home creates a much larger management exposure.

At that point, the question is no longer simply, “Who drives which truck?”

The more important questions become:

• Who is allowed to drive?
• How does the company decide whether that person is acceptable?
• How often are driving records reviewed?
• What happens when a driver gets a serious violation?
• Are supervisors accountable for unsafe driving?
• How are accidents investigated?
• Are preventable accidents being identified?
• Is vehicle maintenance documented?
• Is telematics data being collected but ignored?
• Can management show whether fleet performance is improving or deteriorating?

Those are management-control questions, and they are why a real fleet safety program is more valuable than a generic employee-handbook paragraph.

North Carolina Fleet Risk Is Not Theoretical

North Carolina businesses operate fleets on a road system that produces a substantial volume of crashes every year. The North Carolina Division of Motor Vehicles publishes statewide crash statistics through its official Crash Facts reporting program.

For a company operating vehicles throughout Wake Forest, Raleigh, Durham, Cary, the Triangle, or across North Carolina, those statewide crash trends are more than transportation statistics. Every additional mile driven creates opportunities for rear-end crashes, intersection losses, backing incidents, distracted-driving events, vehicle damage, injuries, and liability claims.

1. Establish Written Driver Qualification Standards

Fleet safety starts before an employee receives the keys.

The company should establish written criteria defining who is eligible to operate a company vehicle and how that eligibility is evaluated. The standard should fit the operation rather than relying on an informal decision by a branch manager or supervisor.

A mature driver qualification process may address:

• Valid licensing for the vehicle being operated.
• Motor vehicle record review before driving privileges are granted.
• Acceptable and unacceptable violation history.
• Serious violations that require management review.
• Minimum driving experience where appropriate.
• Rules for newly hired or probationary drivers.
• Procedures for employees who operate personal vehicles on company business.
• Required reporting of new citations, suspensions, or license changes.

OSHA recommends that employers ensure drivers are properly licensed for the vehicles they operate and maintain systems for tracking licensing requirements.

For fleets subject to FMCSA requirements, additional driver qualification and recordkeeping obligations may apply. Those requirements should be evaluated separately based on the vehicles, operations, and applicable regulations.

2. Monitor Drivers After They Are Hired

One of the biggest weaknesses in an otherwise good fleet program is treating the pre-hire MVR as the end of the process.

A driver’s record can change substantially during employment. A driver who qualified three years ago may no longer look like the same risk today.

A middle-market company should have a defined process for periodic MVR review and for responding to adverse changes.

The response matters as much as the MVR

If a company identifies speeding violations, license suspensions, reckless driving, repeated at-fault accidents, or another significant issue, there should be a documented escalation process.

Depending on the circumstances, that might include:

• Supervisor review.
• Additional driver training.
• Probation or increased monitoring.
• Restrictions on vehicle use.
• Removal of driving privileges.

The exact standard should fit the company and applicable employment requirements. What matters from a fleet-management standpoint is consistency and documentation.

3. Build Driver Training Around the Actual Fleet

A driver safety program should not consist solely of having employees sign a policy during onboarding.

OSHA recommends initial and ongoing driver training, with training that reflects the vehicles employees are expected to operate and the hazards they encounter.

Depending on the operation, training may address:

• Defensive driving.
• Backing and parking.
• Vehicle size, handling, and blind spots.
• Speed management.
• Seat belt requirements.
• Distracted driving.
• Drowsy and impaired driving.
• Vehicle inspections.
• Load or equipment securement where applicable.
• Accident-scene procedures.

A plumbing company operating service vans has a different driving exposure from a contractor operating pickups with trailers, a distributor running box trucks, or a company whose employees spend most of the day traveling between customer locations.

The training program should reflect those differences.

4. Have a Real Distracted-Driving Policy

Distracted driving deserves its own written standard rather than a vague instruction to “drive safely.”

A company should also look at whether its own operating procedures contribute to the problem. Dispatching, rerouting, scheduling, customer communication, and supervisor expectations can create pressure for drivers to interact with phones while moving.

A useful policy should address issues such as:

• Handheld phone use.
• Texting and messaging.
• Navigation changes while moving.
• Dispatch communication.
• Eating or other distracting activities.
• Expectations for pulling over safely when communication is necessary.

5. Create a Preventive Maintenance and Inspection System

Driver behavior is only one side of fleet risk. The condition of the vehicles matters too.

A mature preventive-maintenance process should establish scheduled inspection and service procedures rather than waiting for a breakdown or driver complaint.

For a larger fleet, management should be able to identify:

• Who is responsible for maintenance.
• How maintenance intervals are established.
• How drivers report defects.
• What defects require a vehicle to be taken out of service.
• How completed repairs are documented.
• Whether overdue maintenance is being tracked.

A company with 30, 50, or 100 vehicles should not need to reconstruct its maintenance history from invoices after an underwriter asks for it.

6. Establish an Accident Reporting and Investigation Process

An accident-reporting procedure should tell employees exactly what to do after a crash.

That may include requirements for contacting management, obtaining information, photographing the scene when safe, reporting injuries, cooperating with authorities, and promptly notifying the appropriate insurance contact.

But a mature program goes beyond reporting.

Management should review meaningful crashes for contributing factors and determine whether a change in policy, training, supervision, routing, maintenance, or driver status is warranted.

Ask why the accident happened

Management should look for patterns rather than treating every accident as an isolated insurance event.

For example:

• Are backing accidents concentrated in one department?
• Are accidents happening late in long shifts?
• Does one location have a higher accident frequency?
• Are new drivers overrepresented?
• Are certain vehicle types involved disproportionately?
• Are the same drivers having multiple incidents?

That is where accident data becomes a management tool rather than merely a claims report.

7. Define What Happens After a Preventable Accident

A written policy without consequences is difficult to enforce consistently.

Middle-market companies should establish a process for determining when an accident or unsafe-driving event requires additional action.

That does not mean every incident should result in termination. It means management has a consistent escalation framework.

Possible responses may include:

• Coaching.
• Retraining.
• Ride-alongs or supervisor observation.
• Written warning.
• Temporary restriction of driving privileges.
• Permanent removal from a driving position when appropriate.

Consistency matters. A fleet safety policy should not exist only for the employees management already wants to discipline.

8. Use Telematics as a Management Tool, Not Just a Tracking Device

Many larger fleets already have GPS or telematics systems. The better question is whether anybody is doing anything meaningful with the data.

Depending on the system, management may be able to identify patterns involving:

• Speeding.
• Hard braking.
• Rapid acceleration.
• Seat belt use.
• After-hours vehicle use.
• Route behavior.
• Other indicators of risky driving.

In-vehicle monitoring can help identify risky driving behavior, support coaching, and highlight fleet-wide trends.

The important part is closing the loop.

If management receives hundreds of speeding alerts every month and nothing happens, the technology has not created much of a safety program.

9. Track Fleet Safety Metrics at the Management Level

A middle-market fleet should know whether its safety performance is getting better or worse.

The exact dashboard will depend on the company, but management might track:

• Total accidents.
• Preventable accidents.
• Accidents by driver or department.
• Accidents by vehicle type.
• Serious moving violations.
• Telematics exceptions.
• Driver training completion.
• Overdue vehicle maintenance.
• Open corrective actions.
• Claim frequency and severity trends.

This gives management information it can actually use to reduce losses.

It can also help the company explain its fleet risk more intelligently when the commercial auto program is being reviewed.

10. Assign Ownership of the Fleet Safety Program

Someone has to own the process.

In a middle-market company, that may be a safety director, fleet manager, operations executive, HR leader, controller, branch manager, or a combination of departments.

What matters is that responsibilities are defined.

Management should know who:

• Approves drivers.
• Reviews MVRs.
• Monitors telematics.
• Schedules training.
• Tracks maintenance.
• Investigates accidents.
• Approves corrective action.
• Reports fleet results to senior management.

If everybody is responsible, nobody may actually be responsible.

What Should You Prepare Before Commercial Auto Renewal?

Do not wait for the first underwriter question to start gathering the fleet story.

For established fleets in Raleigh, Wake Forest, Durham, Cary, and throughout North Carolina, the renewal process can become considerably more complicated when there are numerous drivers, locations, loss activity, specialized vehicles, or rapid growth.

Depending on the size and complexity of the account, useful renewal information may include:

• Current vehicle schedule.
• Current driver schedule.
• Updated loss runs.
• Fleet safety policy.
• Driver qualification standards.
• MVR review procedures.
• Driver training documentation.
• Telematics program information.
• Preventive-maintenance procedures.
• Accident-review procedures.
• Corrective actions implemented after significant losses.
• Explanation of major operational changes.

Not every carrier will ask for every item. But if the fleet has meaningful premium, unfavorable losses, rapid growth, difficult vehicle classes, or prior underwriting concerns, having the information organized can make the renewal process substantially more productive.

Can a Fleet Safety Program Lower Commercial Auto Insurance Costs?

It can contribute to a better risk profile, but there is no guarantee that creating a safety manual will reduce premium.

Commercial auto pricing can be affected by many factors, including vehicle types, radius of operation, driver characteristics, loss history, limits, deductibles, garaging, industry, fleet size, carrier appetite, and the overall insurance market.

For larger accounts, however, a well-managed fleet can give an underwriter more information with which to evaluate the risk.

There is an important difference between:

“We had several accidents, but we’re working on safety.”

and:

“We identified the accident trend, changed our driver qualification standards, implemented recurring MVR review, added supervisor coaching through telematics, retrained the affected drivers, and can show the results.”

The second statement gives an underwriter something concrete to evaluate.

The Insurance Program Still Needs to Be Reviewed

Fleet safety does not replace a properly structured commercial auto insurance program.

A middle-market renewal should also evaluate the insurance structure itself, including issues such as:

• Liability limits.
• Physical damage deductibles.
• Uninsured and underinsured motorist coverage.
• Hired and non-owned auto exposure.
• Employees using personal vehicles for business.
• Rental vehicles.
• Trailers and attached equipment.
• Contractual auto requirements.
• Commercial umbrella or excess liability.

The right structure depends on the operation, contracts, vehicle usage, loss exposure, and policy language.

Stephen Ellias, CLCS

Founder of Carolina Risk Partners and a North Carolina commercial insurance advisor. Stephen works with contractors and established businesses on commercial auto, workers compensation, liability, property, umbrella, bonds, and related insurance programs. NC Insurance License 20374030.

This article provides general insurance and risk-management information and is not legal, safety, regulatory, or coverage advice. Insurance coverage depends on the specific policy, endorsements, exclusions, limits, facts, and circumstances. Fleet safety and regulatory requirements vary by operation. Businesses subject to DOT or FMCSA requirements should evaluate the regulations applicable to their specific operations.