cost effective risk management tools

©2004 LeasePlan, an ISO 9000 registered company. All rights reserved.

LeasePlan USA

1165 Sanctuary Parkway Alpharetta, GA 30004

Tel: 800-669-4320 • www.us.leaseplan.com

Fleet Safety Programs

Cost Effective Risk Management Tools

Driving Awareness 2.1

20228_rev_leaseplan.qxd 11/11/2004 5:21 PM

• $10,200 or 85 percent is soft costs, which

can include worker's compensation, liability

costs, medical costs, rental vehicle, time out

of work, replacement personnel, added

training costs, short- and long-term disability,

management time, etc.

*Statistics provided by Gold Cross Safety Corporation and may

vary based upon the driver, demographics, the company, and

many other factors.

The ROI for a cost-effectivedriver safety program isclear.

If an organization with 500 vehi-

cles initiates an effective driver

safety training program at a cost

of less than $100 per driver per

year, the total cost would be

less than $50,000. A reduction

in the accident rate from 20 per-

cent to 19 percent would more

than pay for the program. It has

been proven that an effective

program can reduce crashes and

thereby reduce costs ranging

from five to 50 percent. A reduc-

tion from 20 to 18 percent repre-

sents a return on investment of

more than 100 percent. In addi-

tion, accidents that have been

prevented by this training add to

the cost reduction.

ACCIDENT REDUCTION EXAMPLE:

100 incidents represents $1,200,000

20 percent accident rate

(100 X $12,000)



(90 X $12,000)

Savings $120,000

Costs $50,000

Net Savings $70,000

Managers responsible for fleet "loss control"

should understand that a successful driver safety

training program starts with a clearly defined writ-

ten corporate fleet safety policy signed by each

driver. The policy should clearly explain specific

corporate requirements for each driver, including

safety training mandated by the company.

Additional benefits for adriver safety program.Many major property and

casualty insurers will recog-

nize an organization that has

an effective driver safety train-

ing program with premium

reductions at both the primary

and excess insurance levels.

This is based upon an under-

writing analysis which takes

into account effective driver

safety training as a factor.

Even major life insurance

companies are using a dri-

ver's motor vehicle record as

an integral part of their under-

writing process.

In addition, companies that

have effective driver safety

training programs and poli-

cies can attempt to defend

themselves in lawsuits under

the emerging legal doctrine of

"negligent entrustment."

SummaryEvery company should take a

hard, honest look at their cur-

rent driver safety training

efforts. If they don't meet the criteria set forth

here, your company should begin the process of

setting up an effective program that will both man-

age risk and generate measurable ROI results.

Training at all levels should be continuous to keep

safety at the forefront of corporate goals and objec-

tives. These goals and objectives should be meas-

ured and reevaluated on an ongoing basis. From a

human perspective, a driver safety training program

is the right thing to do.

For specific advice and consultation for your fleet,

contact your LeasePlan Sales Representative at

800-457-8721.

IntroductionYear after year, vehicle accidents are the leading

cause of job-related injuries and fatalities in com-

panies with fleets. From a corporate monetary

perspective, the costs can have a negative impact

on profits. In human terms, the cost is incalculable.

Companies have a tremendous investment in their

firm's human capital. Any effective risk management

strategy should aim at reducing your company's

losses related to your most valuable asset -- your

employees. It's an exposure that occurs every time

you put a driver behind the wheel of a vehicle for

which your organization is legally liable.

In terms of the economic impact, the National

Highway Traffic Safety Administration (NHTSA)

estimates that all vehicle collisions cost approxi-

mately $230 billion per year. Those costs include

lost productivity, lost wages, medical payments

and repairs -- an entire gamut of expenses that cut

into the bottom line of virtually every U.S. business.

Vehicle accident statistics are even more sobering.

Last year, NHTSA reported that approximately

43,000 Americans died as a result of vehicle-related

accidents -- a tragic statistic, especially given the

fact that the vast majority of those deaths could

have been prevented. In addition, there were more

than six million non-fatal accidents.

As further evidence of the need for driver safety

programs, a leading international fleet management

company recently commissioned an independent

survey of its clients' drivers. The study found that

almost one in five U.S. fleet drivers reported an

incident in the last two years, and another 42 per-

cent have had accidents within the last three to five

years. These findings are very conservative.

As a fleet operator, what is the answer?As a company that utilizes a fleet of vehicles, you

are continually engaged in risk management. You

work hard to get the best possible financing, to

enter into favorable lease contracts, to obtain insur-

ance discounts and to seek out the best contracts

to maintain and repair your vehicles.

According to Daniel P. Lanktree, president of Gold

Cross Safety Corporation and a fleet safety industry

expert, the most valuable risk management tool for

an organization with fleets is a quality, proven,

driver safety training program based on the charac-

teristics and demographics of an organization's drivers.

It must be supported at all levels of management,

including the organization's senior management,

and become an integral part of the corporation's

fleet safety policy. A training program for managers

responsible for company drivers must also be

implemented.

In essence, quality driver training should become

part of the organization's culture. After providing

basic quality driver training, the key to success is

continuous training and ongoing assessment of

company drivers. Driver assessments help to iden-

tify driver risk profiles and specific training topics

based on the risk assessments. Specific training

can improve driver weaknesses.

Is implementing a driver safety trainingprogram a smart investment?First, it is important to realize there are many levels

of driver safety training based on overall corporate

and individual needs. An effective driver safety

training program forms the basis for ongoing over-

all and specific training within an organization.

This training can be delivered using one or more

methodologies concurrently. An ideal basic pro-

gram will provide drivers with the ability to "see it,

hear it and document it."

Attitude and behavior modification training can be

delivered in various formats from video (VHS, DVD

and CD), Intranet and Internet with supporting

workbooks, testing and documentation in either

hard copy or online formats. The typical annual

cost for a driver safety program can be as little as

$100 or less per year per driver depending upon the

intensity and delivery methodology.

Such reinforcement is necessary and more effective

when augmented on a quarterly basis with ongoing

training, newsletters, safety tips, safe driver awards

and other positive reinforcement tools. Companies

should also adopt specific safety policies that provide

consequences for unsafe driving, such as vehicle

or employment loss.

Gold Cross Safety Corporation estimates that the

average cost of a corporate vehicle collision is

approximately $12,000* per occurrence of which 85

percent of that amount relates to soft costs (or the

intangible costs).

*$12,000 Breakdown

• $1,800 or 15 percent is for vehicle repairs (i.e. the "bent metal" cost)

Case Study:A corporate manager from a major

healthcare company with more than

3,500 vehicles states that the key to

his company's success was developing

an ongoing driver training program

that raised driver awareness and kept

driver safety training as a priority on

senior management's agenda. This

meant constant follow up, including

newsletters, real life success stories

and timely, ongoing training programs.

The healthcare company's driver train-

ing results include:

1. 25 percent incident reduction

2. 22 percent reduction in "at fault"

collisions

3. Decrease in driver injury rate

4. Accident severity down 16 percent

And, finally, according to this company,

it was imperative to check motor vehicle

records prior to putting the driver on

the road. This includes family members

who are eligible to drive the company

vehicle. It is important to rate these

drivers based on risk levels and to

provide appropriate training in a timely

manner.

20228_rev_leaseplan.qxd 11/11/2004 5:21 PM Page 3

• $10,200 or 85 percent is soft costs, which

can include worker's compensation, liability

costs, medical costs, rental vehicle, time out

of work, replacement personnel, added

training costs, short- and long-term disability,

management time, etc.

*Statistics provided by Gold Cross Safety Corporation and may

vary based upon the driver, demographics, the company, and

many other factors.

The ROI for a cost-effectivedriver safety program isclear.If an organization with 500 vehi-

cles initiates an effective driver

safety training program at a cost

of less than $100 per driver per

year, the total cost would be

less than $50,000. A reduction

in the accident rate from 20 per-

cent to 19 percent would more

than pay for the program. It has

been proven that an effective

program can reduce crashes and

thereby reduce costs ranging

from five to 50 percent. A reduc-

tion from 20 to 18 percent repre-

sents a return on investment of

more than 100 percent. In addi-

tion, accidents that have been

prevented by this training add to

the cost reduction.

ACCIDENT REDUCTION EXAMPLE:



(100 X $12,000)



(90 X $12,000)

Savings $120,000

Costs $50,000

Net Savings $70,000

Managers responsible for fleet "loss control"

should understand that a successful driver safety

training program starts with a clearly defined writ-

ten corporate fleet safety policy signed by each

driver. The policy should clearly explain specific

corporate requirements for each driver, including

safety training mandated by the company.

Additional benefits for adriver safety program.Many major property and

casualty insurers will recog-

nize an organization that has

an effective driver safety train-

ing program with premium

reductions at both the primary

and excess insurance levels.

This is based upon an under-

writing analysis which takes

into account effective driver

safety training as a factor.

Even major life insurance

companies are using a dri-

ver's motor vehicle record as

an integral part of their under-

writing process.

In addition, companies that

have effective driver safety

training programs and poli-

cies can attempt to defend

themselves in lawsuits under

the emerging legal doctrine of

"negligent entrustment."

SummaryEvery company should take a

hard, honest look at their cur-

rent driver safety training

efforts. If they don't meet the criteria set forth

here, your company should begin the process of

setting up an effective program that will both man-

age risk and generate measurable ROI results.

Training at all levels should be continuous to keep

safety at the forefront of corporate goals and objec-

tives. These goals and objectives should be meas-

ured and reevaluated on an ongoing basis. From a

human perspective, a driver safety training program

is the right thing to do.

For specific advice and consultation for your fleet,

contact your LeasePlan Sales Representative at

800-457-8721.

IntroductionYear after year, vehicle accidents are the leading

cause of job-related injuries and fatalities in com-

panies with fleets. From a corporate monetary

perspective, the costs can have a negative impact

on profits. In human terms, the cost is incalculable.

Companies have a tremendous investment in their

firm's human capital. Any effective risk management

strategy should aim at reducing your company's

losses related to your most valuable asset -- your

employees. It's an exposure that occurs every time

you put a driver behind the wheel of a vehicle for

which your organization is legally liable.

In terms of the economic impact, the National

Highway Traffic Safety Administration (NHTSA)

estimates that all vehicle collisions cost approxi-

mately $230 billion per year. Those costs include

lost productivity, lost wages, medical payments

and repairs -- an entire gamut of expenses that cut

into the bottom line of virtually every U.S. business.

Vehicle accident statistics are even more sobering.

Last year, NHTSA reported that approximately

43,000 Americans died as a result of vehicle-related

accidents -- a tragic statistic, especially given the

fact that the vast majority of those deaths could

have been prevented. In addition, there were more

than six million non-fatal accidents.

As further evidence of the need for driver safety

programs, a leading international fleet management

company recently commissioned an independent

survey of its clients' drivers. The study found that

almost one in five U.S. fleet drivers reported an

incident in the last two years, and another 42 per-

cent have had accidents within the last three to five

years. These findings are very conservative.

As a fleet operator, what is the answer?As a company that utilizes a fleet of vehicles, you

are continually engaged in risk management. You

work hard to get the best possible financing, to

enter into favorable lease contracts, to obtain insur-

ance discounts and to seek out the best contracts

to maintain and repair your vehicles.

According to Daniel P. Lanktree, president of Gold

Cross Safety Corporation and a fleet safety industry

expert, the most valuable risk management tool for

an organization with fleets is a quality, proven,

driver safety training program based on the charac-

teristics and demographics of an organization's drivers.

It must be supported at all levels of management,

including the organization's senior management,

and become an integral part of the corporation's

fleet safety policy. A training program for managers

responsible for company drivers must also be

implemented.

In essence, quality driver training should become

part of the organization's culture. After providing

basic quality driver training, the key to success is

continuous training and ongoing assessment of

company drivers. Driver assessments help to iden-

tify driver risk profiles and specific training topics

based on the risk assessments. Specific training

can improve driver weaknesses.

Is implementing a driver safety trainingprogram a smart investment?First, it is important to realize there are many levels

of driver safety training based on overall corporate

and individual needs. An effective driver safety

training program forms the basis for ongoing over-

all and specific training within an organization.

This training can be delivered using one or more

methodologies concurrently. An ideal basic pro-

gram will provide drivers with the ability to "see it,

hear it and document it."

Attitude and behavior modification training can be

delivered in various formats from video (VHS, DVD

and CD), Intranet and Internet with supporting

workbooks, testing and documentation in either

hard copy or online formats. The typical annual

cost for a driver safety program can be as little as

$100 or less per year per driver depending upon the

intensity and delivery methodology.

Such reinforcement is necessary and more effective

when augmented on a quarterly basis with ongoing

training, newsletters, safety tips, safe driver awards

and other positive reinforcement tools. Companies

should also adopt specific safety policies that provide

consequences for unsafe driving, such as vehicle

or employment loss.

Gold Cross Safety Corporation estimates that the

average cost of a corporate vehicle collision is

approximately $12,000* per occurrence of which 85

percent of that amount relates to soft costs (or the

intangible costs).

*$12,000 Breakdown

• $1,800 or 15 percent is for vehicle repairs (i.e. the "bent metal" cost)

Case Study:A corporate manager from a major

healthcare company with more than

3,500 vehicles states that the key to

his company's success was developing

an ongoing driver training program

that raised driver awareness and kept

driver safety training as a priority on

senior management's agenda. This

meant constant follow up, including

newsletters, real life success stories

and timely, ongoing training programs.

The healthcare company's driver train-

ing results include:

1. 25 percent incident reduction

2. 22 percent reduction in "at fault"

collisions

3. Decrease in driver injury rate

4. Accident severity down 16 percent

And, finally, according to this company,

it was imperative to check motor vehicle

records prior to putting the driver on

the road. This includes family members

who are eligible to drive the company

vehicle. It is important to rate these

drivers based on risk levels and to

provide appropriate training in a timely

manner.

20228_rev_leaseplan.qxd 11/11/2004 5:21 PM

©2004 LeasePlan, an ISO 9000 registered company. All rights reserved.

LeasePlan USA

1165 Sanctuary Parkway Alpharetta, GA 30004

Tel: 800-669-4320 • www.us.leaseplan.com

Fleet Safety Programs

Cost Effective Risk Management Tools

Driving Awareness 2.1

20228_rev_leaseplan.qxd 11/11/2004 5:21 PM Page 1

cost effective risk management tools

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