1. Developing a ComprehensivePersonal Auto Fleet SafetyProgram Aon Technical Services presentationInsert Business Descriptor Chad B. KruegerRisk Control Consultant Nicolet Chapter-ASSESeptember 12, 2007

2. Motorists have exhibited the one worse attitude than defiance of the law indifference to it.Frederick Dwight - 1908 9/17/20072 Aon Technical Services 3. William Phelps Eno (1858-1945) Does anyone know who this man is? 9/17/2007 3 Aon Technical Services 4. William Phelps Eno (1858-1945) The Father of Traffic Safety Born in New York City Developed the worlds first traffic code Designed: The stop sign One-way streets Pedestrian safety islands Taxi Stands Traffic Circle He designed the traffic circle around the Arc de Triomphe in Paris He was an avid fan of horse back riding He never once drove a car, referring to the automobile 9/17/2007 as a fad4 Aon Technical Services 5. Why are we here???? Just this morning on Hwy 41 9/17/20075 Aon Technical Services 6. Why are we here???? Fleet Programs are a Risk Management Best Practice Best of the Best What are other companies doing? Concerns about Negligent Entrustment? OSHAs Guidelines for Employers to Reduce Motor Vehicle Crashes-They want to see our fleet programs!!! Insurance Company Requirements? High Frequency of Motor Vehicle Accidents? Some Employees have lost their License. An uneasy feeling that Fleet Safety needs to be addressed but we 9/17/2007 are not sure how to start. 6 Aon Technical Services 7. What is a driver??? Not just CDL/DOT Drivers regulated by FMCSRs. The driver of any vehicle operated on public roads Understand that you are not just hiring a: Salesperson Foreman 9/17/20077 Aon Technical Services 8. Accident vs. Collision Accident: Implies the event is not preventable Collision: An event that is generally the result of human error 90% of crashes is caused by some type of human error!!! 9/17/20078 Aon Technical Services 9. NCCI Study National Council on Compensation Insurance-Dec. 2006 Traffic AccidentsA Growing Contributor to Work Comp Losses Key Findings: Motor vehicle accidents are more severe than the average workers compensation claim, comprising close to 2% of claims but more than 5.5% of losses, on average, from 1997 to 2003. They are more likely to be lost-time and comprise a disproportionate share of the most severe claim types. Risk varies by type of vehicle. Frequency of fatalities is higher for trucks; frequency of nonfatal injuries is higher for passenger vehicles. Motor vehicle accidents comprise a growing share of workers compensation injuries. Frequency is declining but at a slower pace than for workers compensation claims overall. In terms of claims characteristics, motor vehicle claims impact a diverse range of occupations in addition to truckers (particularly salespersons and clerical). Top diagnoses include neck injuries, duration is more than 70% longer, subrogation is significant, and attorney involvement is greater. 9/17/2007 Driver attitudes and driving practices are essential to safety, and employers can play a large part in encouraging safe practices and procedures. 9 Aon Technical Services 10. NCCI Study National Council on Compensation Insurance-Dec. 2006 9/17/200710 Aon Technical Services 11. Issues Motor Vehicle Crashes are the #1 Killer of the American Work Force OSHA Negligent Entrustment Employee Privacy (MVRs) Autos not owned by the company Defensive Driver Training Brand Risk??? 9/17/2007 11 Aon Technical Services 12. Work Related FatalitiesCensus of Fatal Occupational Injuries (CFOI) - 2006 9/17/200712 Aon Technical Services 13. Work Related FatalitiesCensus of Fatal Occupational Injuries (CFOI) - 2006 9/17/200713 Aon Technical Services 14. Work Related Fatalities Organizations likely spend a large amount of resources to combat the standard causes of injury and fatalities But we tend to be oblivious to the #1 cause Every responsible organization must develop a fleet safety program if they wish to have a top- notch safety program 9/17/2007 14 Aon Technical Services 15. What is Negligent Entrustment? First a disclaimer I am not a lawyer!!! 9/17/200715 Aon Technical Services 16. What is Negligent Entrustment? A legal term that means you trusted someone with something dangerous, and you knew or should have known better than to trust that person. Companies are liable for the damages caused by the untrustworthy person I didnt know defense does not work For organizations, this occurs when vehicles (owned or non-owned) are trusted to unworthy personnel 9/17/200716 Aon Technical Services 17. What is Negligent Entrustment? More and more companies are on the firing line for N-E lawsuits, as the victims and their attys. can be assured of a larger payout if they win. Orgs. with high profiles are especially vulnerable to claims of N-E, whether theyre true or not Ed Dubens, Pres. Interactive Driving Systems The climate today is such that the law says a company that entrusts an employee with a vehicle should know if the employee is qualified to drive it. Jim Colangelo, V.P. PHH Arval 9/17/2007 Dealing with Employees a the (Roulette) Wheel, Risk & Insurance Mag., April 200717 Aon Technical Services 18. What is Negligent Entrustment? Examples or Entrustment: Client appointments Jobsite visits Temporary or summer help run errands Security Guards use Co. vehicles to make rounds Driving to other company locations Delivering equipment or supplies Driving clients to lunch Rental cars on business trips Company provided vehiclesfamily members? Picking up mail Any driving actions that contribute to the organization. 9/17/200718 Aon Technical Services 19. What is Negligent Entrustment? Examples of Negligent Entrustment: Dealing with Employees at the (Roulette) Wheel, Risk & Insurance Mag. April 2007 Socially unacceptable driving records 9/17/2007 19 Aon Technical Services 20. Insurance Carriers Fleet Policies are no longer an option Organizations submit driver lists & the Ins. Co. runs the records of most if not all drivers on the list Overall risk does effect ins. availability and pricing. MVRs run by Ins. Cos. (or brokers/agents) can not be shared with the insured. (Fair Credit Reporting Act.) An unapproved driver means the Ins. Co. will not insure that driver. Can be an issue at renewal time Additional cost Recent Risk: Out of 23 drivers run by the carrier, 12 were not acceptable. 9/17/2007 Orgs. Must take ownership of the MVR process!!!20 Aon Technical Services 21. We Must Check Driving Records! Its the only way to determine driver safety But hes a really great worker Orgs. must take ownership of the MVR process Consider who really needs to be a driver Manage the list and update it frequently Approved Driver List A constantly updated list that reflects all authorized drivers with acceptable MVRs Develop oneonly actual drivers Do not let the Ins. Co. dictate the process You should know There should be no surprises 9/17/200721 Aon Technical Services 22. We Must Check Driving Records!How often? Before hire, bi-annually, annually, semi-annually ? Privacy? Employee Spouse Ignorance is not bliss? The plaintiff lawyers are prepared, your organization should be as well. 9/17/2007 22 Aon Technical Services 23. We Must Check Driving Records! Where can we get them? States: WI DOTI Program Employees can get them National Programs Background Check Companies like USIS They are obtainable Must have employee authorization (FCRA) There is a cost $$$ WI $5 MI $2 Normally between $2 & $12 9/17/2007 23 Aon Technical Services 24. What is an Acceptable MVR? Drivers License = Safe Driver? See: General Motor Vehicle Record Acceptability Standards Socially acceptable driving record Will your standards hold up with a jury? Are you consistent? This all boils down to: If the worst happens, will our fleet safety program be defensible? Or will we be forced to make it more stringent after the 9/17/2007 settlement/verdict? 24 Aon Technical Services 25. Consider using a Company VehicleWaiver See: XYZ Company Vehicle Waiver They are like an umbrella. They do not stop the rain, but they may keep you dry. In other words, they will not keep you from being sued but they may reduce the companys liability. And, since wrongful death suite can easily cost plaintiffs millions, they are work the effort!!! Should be issued to all new drivers, updated and reissued annually with any policy changes. 9/17/2007 Fleet safety should be in the forefront.25 Aon Technical Services 26. What are the Components of a Fleet Safety Program? (OSHA, NHTSA & NETS) 1. Sr. Mgt. Commitment & Employee Involvement 2. Written Policies and Procedures Seatbelts, cell phones, distracted driving 3. Driver Agreements 4. Motor Vehicle Record Checks 5. Crash Reporting and Investigation 6. Vehicle Selection, Maintenance and Inspection 7. Disciplinary Action System 8. Reward/Incentive Program 9. Driver Training/Communication 10. Regulatory Compliance 9/17/2007 26 Aon Technical Services 27. What are the Components of a Fleet Safety Program? (OSHA, NHTSA & NETS) In addition to the DOT, State, Ins. Co., FMCSAand others OSHA is now interested in our fleetprograms Due to the injury and fatality rate, they are nolonger allowing just the DOT to have jurisdiction If your org. is inspected, expect them to ask toreview your fleet policyCould it be a precursor to a new standard??? 9/17/200727 Aon Technical Services 28. What are the Components of a Fleet Safety Program? 1. Sr. Mgt. Commitment & Employee Involvement It must be supported: CEO, CFO, COO, V.P. of Sales, HR Director, Safety, Risk Manager, They must agree and sign off It must be enforceable and not just a feel good document Examples: V.P. of Sales, Forman Crew Can we enforce it if our best sales person, #1 employee or the owners son must be removed from driving privilages? If not, the company could have issues in court 9/17/2007 28 Aon Technical Services 29. What are the Components of a Fleet Safety Program? 9/17/200729 Aon Technical Services 30. What are the Components of a Fleet Safety Program? 2. Written Policies and Procedures Seatbelts Cell phones and Personal Electronic Devices What is safe use Liability-Cell Records Monitor Use Alcohol and Drug Use Policy Acceptable Use or Zero Tolerance Acceptable BAC: .00, .04, .08, State Regs., International Regs.? Education is key 9/17/2007 Distracted/Drowsy driving 30 Aon Technical Services 31. What are the Components of a Fleet Safety Program? 3. Driver Agreements Contract with all employees who driver for work Whether they drive assigned company vehicles or personal vehicles By signing the agreement the driver acknowledges awareness and understanding of the orgs.: Traffic Policies Procedures Expectations Regarding: Driver Performance Vehicle Maintenance Reporting of Moving Violations and ReportableAccidents 9/17/200731 Aon Technical Services 32. What are the Components of a Fleet Safety Program? 4. Motor Vehicle Record Checks Already Discussed Must screen out drivers with poor records. They are most likely to cause problems Reviewed at least annually to ensure they maintain a good record Clearly define the # of violations and driver can have before losing the privilege of driving for work, and provide training where needed Q: If a persons MVR is outside the company policy, should we have them get their own car and insurance? 9/17/200732 Aon Technical Services 33. What are the Components of a Fleet Safety Program? 5. Crash Reporting and Investigation Establish and enforce this process All crashes regardless of severity should be reported to the org. ASAP All vehicles should be equipped with an accident kit Company fleet safety policies should guide drivers through their responsibilities in a crash situation Crashes should be reviewed to determine their cause and whether or not they were preventable Understanding the root cause and why they are happening, regardless of fault, forms the basis for eliminating them in the future. Just like any other safety policy or program 9/17/2007 33 Aon Technical Services 34. What are the Components of a Fleet Safety Program? 6. Vehicle Selection, Maintenance and Inspection Selecting, maintaining and routinely inspecting companyvehicles is an important part of preventing crashes andrelated losses Vehicle safety features Routine Preventative Maintenance Mileage Intervals Mechanic should conduct thorough inspection of each vehicle annually-Documented Personal vehicles may not be subjectHowever About $20 for a Complete Vehicle Safety Inspection WI State Vehicle Certification Form complete Checks: Tires, Lights, Brakes, Coolant, Etc. Anything that 9/17/2007 contributes to the safe operation of that vehicle34 Aon Technical Services 35. What are the Components of a Fleet Safety Program? 7. Disciplinary Action System Develop a course of action after an incident Assign points for crashes and violation Progressive Discipline if a driver begins to develop a pattern of repeated violations or accidents Defensive Driver Training Determine a way to keep the person as a driverbefore they are outside of your criteria Systems should describe specific actions that will be taken if a driver accumulates a certain # of violations or preventable crashes in and pre-defined period 9/17/2007 35 Aon Technical Services 36. 9/17/2007ANSI Z15.1:2006-Driver Eligibility 36 Aon Technical Services 37. 9/17/2007Driver Eligibility and Risk Levels Point values differ from state to state. An internal system should beestablished to include a standardized interpretation37 Aon Technical Services 38. What are the Components of a Fleet Safety Program? 8. Reward/Incentive Program Helps make safe driving an integral part of yourbusiness culture Safe driving behaviors contribute directly to thebottom line and should be recognized as such Positive results are realized when driver performance is incorporated into the overall evaluation of job performance(performance review) 9/17/200738 Aon Technical Services 39. What are the Components of a Fleet Safety Program? 9. Driver Training/Communication Seriously Provide continuous driver safety training and communication Believe it or not: Even experienced drivers benefit from periodic DDC training Smith System, NSC DDC, VFRM, Virtual DriverInteractive Reminders of safe driving practices and skill It is easy to become complacent and not think about the consequences of our driving habits 9/17/200739 Aon Technical Services 40. What are the Components of a Fleet Safety Program? 10. Regulatory Compliance State, Federal and International motoring laws Speed limits Cell phone use Construction Zones National Highway Transportation Safety Administration (NHTSA) Federal Highway Administration (FHA) Employment Standards Administration (ESA) 9/17/200740 Aon Technical Services 41. Promote Safety Driving Practices toProtect Your Most Valuable Investment Your Employees!!! Other areas of training that should be addressed viapolicy: Securing Materials for Transport Seat Belt use Distracted Driving Alcohol and Drug Impaired Driving-How to recognize Fatigued Driving Aggressive Driving Young DriversEach one of these could be a training session in itself! 9/17/2007 41 Aon Technical Services 42. Conclusion Ultimately, just like other safety programs, we must utilize and provide the proper tools to ensure the safety of our employees at all times. Including, while they are on the road Incorporate sound Risk Management techniques that will help provide a safe working environment for our employees and help keep the general motoring public safe Its the right thing to do and its good public relations Questions? 9/17/200742 Aon Technical Services