The basics of insurance for a business’s vehicles and drivers are often misunderstood, causing more harm than good. Here, we help to sort fact from fiction on the wide world of fleet insurance.
What is motor fleet risk management?
This is the idea that anyone operating a vehicle must be insured for damage or harm they might inflict on other people. This principle, known as “third-party,” also entails that drivers have insurance for any property damage caused by their car (such as another automobile), and even vehicle breakdown damage.
Why is fleet risk management important?
Fleet risk management is important because it protects others from damage caused by your car, and reduces the chances of your company being hit with high legal fees or punitive damages. It will even protect you in case of any accidents that happen while you are on business travel.
Since risk management is such an important part of operating a fleet, it should be done in the strictest ways possible. Not only should you get enough coverage to protect yourself and other people, but also get enough liability limits so that if something happens you won’t be forced into bankruptcy. Such high limits will help prevent the risk of a lawsuit and protect you from significant financial damage.
It’s important to remember that risk management isn’t just about protecting yourself, but also your drivers and other people on the road. When it comes to risk management, there are several different offerings beneficial for fleets, including risk management insurance and risk management consulting.
What is risk management driving?
Drivers are often seen as a risk when in fact they’re only part of the problem when it comes to insurance for fleets. Here’s where drivers come into play in relation to driving risks:
- Driver training programmes. If your organisation is committed to improving driving standards then take advantage of these discounts, which are available if you have robust driver training programmes in place, especially if this includes safe-driving courses. Insurers offer discounts ranging from 7% to 30%, with some companies awarding discounts for every class attended.
- Safe-driving policies. Managers are responsible for the drivers under their direct supervision, so it’s in your interests to put safe-driving policies into place to protect both you and them. This could include promising no drink or drug driving, no speeding or using mobile phones while driving. Again discounts are available if these policies are strictly enforced.
- Green driver training. Just as green fleets help to reduce risk by being more environmentally friendly, green driver training can offer similar benefits to fleets looking to become more sustainable. Carriers have an interest in promoting this kind of best practice because it helps them meet environmental concerns about fleet operations which will only grow over time – whether that’s because of future legislation or simply market pressure from environmentally ethical consumers leading directly to more demand for green fleets.
- Augmenting fuel costs. If you’re looking to protect your organisation against rising fuel prices then buying a combined fleet insurance policy could save you up to 16% compared with insuring each vehicle individually – but only if you have around 10 or more vehicles. A smaller fleet might be better off holding on to individual policies, but this is something you can discuss with your insurer.
You may also want to consider fleet accessories that could reduce the risk of claims being filed. For example, some insurers will offer safe-driving discounts if their drivers are using telematics equipment – small tracking units attached to each vehicle which measure speed and distance travelled along with other data. Others might grant a discount if their drivers are using satellite navigation systems in conjunction with their telematics package so they know exactly where they are at all times.
Other potential savings include:
- Secure garaging, especially for high-value fleets such as HGVs and specialist vehicles.
- Good driver supervision, such as drivers only using their own vehicles where they’re insured to do so
- Driver training. This can be included in TPFT policies or offered separately, but the more effective your driver training programmes are the less you should have to pay out if an accident occurs. Again, it’s up to individual carriers that you deal with whether there’s enough demand among their customers for this kind of cover, but if there is then discounts could range from 5% upwards.
Risk management doesn’t just involve keeping your fleet safe on the road, it also helps safeguard against other risks. These include corrosion damage due to high-sulphur fuel being used in countries where environmental standards are relatively lax.
This can be expensive to repair because the metalwork often needs to be stripped down and re-coated, so having fleet insurance with corrosion cover could help protect against this problem.
How does a motor fleet policy work?
A fleet policy is designed to cover an entire fleet of vehicles and it’s usually the corporate policy book that sets out what your insurer will and will not cover.
The main purpose is to protect you against third-party claims – in other words, somewhere where somebody has been hurt and they’re suing for damages . Your organisation then pays for any legal costs incurred by defending or settling these claims.
Insurance companies normally offer five levels of liability when it comes to covering damage caused by accidents involving company cars: “third-party only”, “third party fire & theft”, “comprehensive”, “fully comprehensive” and “contents”. The latter offers protection on a contents basis if you have valuable equipment carried in your vehicles such as computers.
It’s not just vehicles themselves that can be covered under a fleet policy , so too can any trailers and caravans towed by such vehicles – but only if they’re included in the contract. Unattached trailer insurance needs to be arranged separately.
Finally, it’s worth pointing out that some of your commercial insurances may contain provisions for you to claim against them if one of your employees is involved in an accident using their own vehicle . However, this only applies if they are driving on company business. If they’re doing something purely private – even if they are wearing their work clothes at the time – then you will have no liability or responsibility whatsoever. An insurance company can cancel your policy at any time, although they will typically give you notice of at least 30 days to allow you to arrange alternative cover. You may also be entitled to a discount if there’s an accident-free year.
If you want more information about fleet policies , talk to your insurer or broker and ask for their advice based on the number of vehicles you have in your fleet, plus how many miles they’re likely to cover during the course of the policy period.
Don’t forget that it’s not just about reducing premiums – one of the most important things about having motor fleet insurance is making sure that everyone knows what steps need to be taken should there be an accident involving one of your vehicles.
