Mitigating risk and rewarding safety 

Many fleet managers and logistics companies are confronted with unique threats and risks on a daily basis. JACO DE KLERK dives into the world of fleet risk management to highlight how the right insurer and “dry driving” can lighten the load.

Arrive Alive says it best in its piece Fleet Insurance and Truck Insurance for Commercial Vehicles: “Businesses operating in the transport industry, which deploy vehicles to an especially far-reaching and intensive degree, need an insurer that appreciates the unique risks faced by the transport industry, in order to receive truck insurance that meets the peculiar demands of extensively operating heavy vehicles.”

The article continues: “Business vehicles may travel extensive distances, often crossing borders into Africa. It may therefore be important that your truck insurance provider offers commercial vehicle insurance with expansive territorial limits so that trucks and other fleet vehicles can cross borders as necessary without complication.”

Heavy hauliers aren’t the only modes that have to deal with unique challenges, however. “Fleet vehicle insurance must also take into account the complexities of insuring business vehicles, such as insuring cars for multiple drivers and making sure vehicles can be used for as many applications as necessary,” Arrive Alive adds.

The article notes that shuttle service companies and other transport services may want to consider taxi insurance combined with fleet insurance. The former includes liability coverage, which Arrive Alive points out is “important for covering the risk of personal injury and death when transporting people”.

Rhys Evans, managing director of drug and alcohol testing equipment and accessories provider Alco-Safe, emphasises that insurers shouldn’t only look at what transport operators need, but should also think about rewarding sound business practices. “If driving under the influence is a reason for insurers to reject claims for vehicle accidents, can drug and alcohol testing programmes be used by businesses to reduce cover premiums for their vehicle fleets?” Evans queries.

He adds that insurance companies are always looking for ways to reduce their risk. “One way to do this is by charging higher premiums to businesses that have a higher risk of accidents,” he explains. “Any organisation with a large fleet of delivery vehicles is a greater risk purely from a numbers perspective and, while the risk of driving under the influence is not currently a weighting factor when calculating business insurance premiums, it should be.”

Evans points out that workplace testing can reduce the risk of accidents caused by drivers who are under the influence. By regularly testing drivers for drugs and alcohol, businesses can identify and remove drivers who are a risk to themselves and others. “This will naturally reduce the number of accidents that occur, leading to enhanced overall fleet safety and efficiency. In turn, surely this should then translate to lower insurance premiums?” he stresses.

Legislative context for workplace testing

When considering commercial drivers, the Occupational Health and Safety Act requires employers to take all reasonable steps to ensure the safety of their employees, which includes ensuring that those employees are not under the influence of alcohol or drugs while working.

“The Road Traffic Act (RTA) defines ‘driving under the influence’ as having a Blood Alcohol Concentration (BAC) of 0.05% or more, while prohibiting driving while under the influence of drugs that impair a person’s ability to drive safely,” Evans expands. “The National Road Traffic Act (NRTA) has a number of provisions designed to improve road safety, including stricter penalties for driving under the influence of alcohol or drugs.”

Severe legal and commercial consequences

Evans says that accidents caused by drivers under the influence can have significant business consequences. “These include financial losses due to liability for damages, potential legal fees, and increased insurance rates,” he notes. “Furthermore, the reputation of the business can also suffer, leading to customer loss, while productivity may decline if a driver is injured or suspended. In this regard, the business can be held legally liable for such accidents.”

From awareness to action: practical risk mitigation

To mitigate these risks (and avoid the costs) businesses should have a strict workplace policy that clearly outlines their stance on driving and the consumption of intoxicating substances. “Employers must consistently enforce their policy, while providing training on the dangers of driving under the influence, as well as promoting responsible driving practices. One of the most practical ways to do this is by investing in workplace testing for alcohol and other intoxicating substances,” Evans reiterates.

He adds that a number of significant South African logistics and delivery companies have started pilot programmes for mandatory testing at their dispatch hubs. Before drivers are permitted to leave the site on a delivery, they must submit to a breathalyser test. “This process is repeated each time the driver returns to the depot to collect a new order for delivery. Such testing is unmanned and automated, simply requiring the mounting of a testing device to a wall near the access control point at a depot location,” says Evans. 

“The access control system can be linked to the results of the breathalyser test – if the driver fails, they are not permitted to proceed,” he continues. “Such testing apparatus can be used to conduct hundreds of tests daily, storing all the data results in a cloud-based platform which makes for easy driver fleet management reporting.”

Safety in the numbers

Evans explains that using these analytics, it is possible to identify problematic drivers for rehabilitation purposes and to get a clear indication of the overall safety performance of the business. “This data can be used for auditory purposes by the relevant labour inspector checking safety compliance, and can just as easily be presented to an insurance provider to petition for and justify a reduction in insurance premiums,” he points out.

“Insurance companies reward individual consumers for driving well through the placement of vehicle monitoring devices. Similarly, they should reward businesses with lower premiums in return for proactively mitigating their risk by ensuring driver safety through workplace drug and alcohol testing,” Evans asserts.

Maybe you should consider raising this point with your insurer? You could potentially add another benefit to those it already provides.