Consequences and the myths of company car risk
Historically, insurers have always considered company car and van drivers to be a high risk bunch, not least because of the higher than average annual mileages they inevitably do.
In addition, it has long been suggested that drivers caught committing offences and receiving endorsements belong in the higher risk category and, as such, are more likely to be involved in an accident. However, more recently, the fleet sector has started to look at these driver risk myths again in a new light.
For instance, it seems logical to compare company car drivers with their private driver counterparts and target each population accordingly.
Other dangerous assumptions fleet managers often make when approaching the issue of fleet risk include the “fact” that company car drivers will do more miles than privateers, are more likely to have a licence endorsement and pose a higher risk when it comes to the likelihood of being involved in an accident.
Most fleet managers would likely agree with the above statements, categorising their company vehicle drivers in the high risk bracket and bemoaning the number of occasions on which they have had to untangle a motoring offence or accident claim within the paperwork.
However, more recent emerging evidence suggests that much of the perceived wisdom regarding driver behaviour does not necessarily stack up.
While many of the facts emerging from a more empirical approach to driver behaviour research may appear obvious at first sight, this subtle shift in understanding could have a huge impact on fleet risk policies.
Certainly, an understanding of why these trends appear can be significant for individual fleet managers, as well as the wider leasing industry as a whole. For example, knowing where the triggers for poor driver behaviour exist could help fleets to reduce costs, better manage risk and support drivers more effectively. It is, after all, only a matter of time before a corporate manslaughter case rears its head in the fleet sector and it pays for businesses to do everything they can to mitigate the risks inherent in requiring employees to drive for work.
The culture of an employer can, for example, play a role in establishing the driving behaviour of its employees. Hence, a safety conscious organisation is likely to put in place the policies and support structure to ensure its drivers are made aware of road safety and speed management, with employees in these organisations more likely to pay attention to the messages being conveyed. Conversely, if an employer takes a lax attitude towards its policies, including driver safety, then this is more likely to generate a similar attitude among that company’s drivers.
In addition to cultural factors, it is generally accepted that company vehicle drivers will tend to drive in more high pressure situations than their private counterparts, regularly commuting on some of the most congested stretches of road in the UK. The added pressure of reaching appointments on time and the use of in-car technology such as mobile phones have been proven to adversely affect a driver’s cognitive abilities. This increased pressure, combined with the perceived lack of consequences around motoring offences and accidents as a company car driver, may go part way to explaining why the statistics suggest company car drivers commit more offences.
The issue of consequences is particularly significant when it comes to looking at remedies for poor driver behaviour. While a driver who insures their own vehicle will pay for their motoring offence or accident through increased insurance premiums, company vehicle drivers tend to be covered under a fleet insurance policy and, therefore, the onus to rectify a situation and get the employee back on the road tends to rest with the employer rather than the driver.
To illustrate the point further, a speeding offence may generate three penalty points on the licence and a one-off fine for the company car driver, but the private driver will also see the additional sting in the tail of an increase of around 15% in their insurance premium for the next five years.
Likewise, if a private car driver has an accident, then they have to pay an excess and an insurance premium increase, as well as arranging the repairs, dealing with the insurers and organising a courtesy car. Conversely, a company car driver can leave it with the fleet manager to arrange repairs while being given a temporary vehicle to conduct business activities.
In addition, as the resale value of the car is irrelevant to the company car driver, there is less incentive to look after the car in terms of general maintenance.
The apparent link between completing high mileage and the occurrence of motoring offences, combined with the perceived lack of consequences as a company car driver, seems to suggest that there is an opportunity for organisations to look at changing driver behaviour.
The benefits are clear; reduced risk, decreased costs and a pool of company car drivers who are more engaged with the safety culture of the organisation. However, the approach requires a careful balancing act.
By introducing greater repercussions for transgressions, there is a danger of alienating drivers and causing instances of under-reporting. If, however, the penalties are combined with incentives, education and a supportive organisational culture, then it is possible to change attitudes and ultimately reduce the number of traffic offences committed by employees driving for work. Not only good for the employer’s bottom line, but also for the reputation of their brand.