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Keys to Effective Fleet Risk Management


In recent months, insurance companies have sharpened their underwriting requirements for fleet operations of all sizes. Notably, they are inquiring about various elements of fleet management programs, and in some cases requiring firms lacking such systems to move quickly to select and implement them.

In this environment, construction contractors need to review their fleet risk management, identify opportunities for improvement and take any appropriate remedial actions. Areas they might address in their internal reviews include: training, distracted driving, litigation defense, logistics software, insurance, driver safety, incident management and vehicle documentation.


As in other elements of building a safety culture, a big issue in training often involves lack of senior leadership support. With respect to driving, this can manifest itself in a variety of ways, including getting mixed messages from what is emphasized in training and feedback provided to drivers from supervisors with respect to their performance.

For instance, while safety may be the focus of training, supervisors might place more emphasis on other aspects of performance. Therefore, it is critical that driver safety priorities presented in training modules are continually reinforced in daily driver feedback. In addition, firms can use annual performance reviews as training opportunities, with employees signing off on areas to target for development, including an action plan of specific measures to be completed within defined timeframes.

Ultimately, when backed by leadership and consistently reinforced, effective training encourages drivers to make prudent decisions, reducing accidents and enhancing safety, productivity and performance.


For any organization with fleet operations, addressing distracted driving is paramount to effective risk management. Contractors should have a documented management practice (fleet manual) that is discussed and continually reinforced through driver training.

A key decision involves whether technology-based measures, such as those used to prevent vehicles from starting when mobile devices are in use, are required or if establishing strict protocols on use of mobile phones or other hand-held devices is sufficient. Statistics show that the use of a handheld mobile device increases accident potential by 23 percent.


Enhanced tracking systems, including video and telemetry, can help strengthen litigation defense, improve outcomes and reinforce training. Companies implementing telemetry systems with dash cams can verify causation. Using these systems, some operators have reduced litigation costs and court awards by 90 percent.

Telemetry systems have multiple uses beyond accident recreation/validation. For instance, contractors can establish comprehensive rules governing idle time, route preference, vehicle usage after hours and definitions of hard stops, sharp turns, rapid acceleration, etc.; however, changing behavior may require the ability to gather information and present it to employees.


A growing number of contractors now use logistics software to enhance safety and improve efficiency in routing and job distribution. Even field vehicles can be equipped with shock sensors, operator requirements to complete inspections prior to movement, tracking and other features.

With respect to over-the-road operations, these systems generally result in lower operating costs, improved maintenance practices, reduced legal risk and better compliance with state idle laws.


Make sure insurance levels and requirements for drivers are adequate and appropriate. For contractors with fleet operations, commercial automobile insurance policies should have a minimum of $1 million in liability limits. Higher limits of $3 million to $5 million are typically required for transporting passengers or hazardous materials. To address transportation-related environmental risks, a new pollution form (“CA9948”) now provides some extended dedicated coverage within the automobile liability limits.


Any evaluation of risk management should involve a review of driver screening and safety measures. Aside from training measures, these can include:

  • obtaining an annual motor vehicle record (MVR) for each driver with a points qualification system;
  • DOT 7- or 10-panel drug tests with standard cut-off levels for pre-employment, random, reasonable suspicion and incidents that warrant testing;
  • annual requirement to complete online or in person driving courses;
  • implementation of flashing light usage, vehicle orientation, cones and other safety devices to protect the employee in certain situations;
  • use of high-visibility reflective vests when outside vehicle;
  • identified PPE for all types of drivers in the right situation (plan for rain, snow, footing, etc.); and
  • supplying polarized sun/safety glasses to reduce glare.

Generally, from a risk management perspective, candidates applying for driver positions that have DUI offenses, reckless operations and suspended licenses are considered unacceptable, as are those with two tickets and one accident in a five-year period. Many firms try to keep drivers to under three minor tickets in a five-year period.

Drug testing for operators of commercial vehicles with a CDL (as well as those without CDL licenses) should follow DOT drug testing requirements performed by a certified medical examiner.

To reinforce driver safety, some firms establish driver reward programs with gift cards or bonuses for good drivers. Additionally, consider holding driver safety meetings at least twice a year.


All fleet drivers must be trained on proper incident investigation and be given the proper tools for it. The top priority is to ensure all people are safe and taken care of. The next aspect is to collect all necessary information and take as many photographs of the accident as possible.

Subsequently, there should be follow-up to ensure everyone is safe and the incident report is completed correctly. Most fleet operators require that all incidents be reported by the end of the shift and have a 24-hour requirement to get the claim into their system.


All vehicles should undergo pre-inspection prior to each usage. For over-the-road vehicles, pre-trip inspections typically include visual checks of tires and lug nuts, windshield, windows, wipers, lights and mileage. Oil levels and tire pressure should be inspected weekly or more often, depending on weather conditions and vehicle utilization. Other measures should be checked as needed based on manufacturer recommendations.

Mobile equipment, such as forklifts, may have special requirements for documentation. For field equipment, greasing schedules, engine hours and other maintenance documentation should be completed and retained.

Given stepped up fleet underwriting requirements, contractors should take steps to shore up their fleet risk management. These measures will not only help them enhance safety, but may result in productivity gains, improved performance and significant cost savings.

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