Sue Copeman looks at proposals aimed at improving employee safety

One of the most dangerous thing that your employees can do is to drive - and that's official. UK Health & Safety Executive (HSE) research estimates that between a quarter and third of all road traffic incidents involve someone - a driver, passenger or member of the public - who is at the work at the time. And, according to the TUC, the 1,000 work-related fatalities, together with 12,000 serious injuries and 70,000 slight injuries, add up to a cost of £3.7bn to society and £2.7bn to employers.

Digging deeper produces some even more alarming statistics. Research by the Transport Research Laboratory suggests that company car drivers have a 30% to 40% greater involvement in road accidents than those driving for domestic purposes. For higher mileage drivers the risks of fatal and major injury are equivalent to those faced by workers in hazardous industries. At 25,000 miles per year the risk of dying is roughly equivalent to such risks in coal mining. According to the Royal Society for the Prevention of Accidents (RoSPA), about 10% of occupational drivers - perhaps 300,000 people - cover this sort of mileage. Arguably, drivers who cover more than 100,000 miles annually get close to levels of intolerable risk.

Since the costs to employers - particularly the uninsured costs - are very significant, why haven't they done more to tackle the problem? RoSPA says that, apart from those relatively few organisations committed to achieving excellence in health and safety (H&S), as opposed to simply regulatory compliance, there has been an unspoken assumption that road safety is not part of occupational safety and health. The main reason for this has been the absence of any specific regulations or official guidance on the subject, compounded by the decision by HSE not to enforce the general requirements of H&S law in this area. A further factor has been that deaths or injuries in work-related road traffic accidents have not been reportable under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR).

If work-related driving accidents have fallen through the health and safety net in the past, this looks set to change. In November last year, following investigation and consultation, the Work-related Road Safety Task Group recommended that existing health and safety law should be applied to on-the-road work activities and that employers should manage road risk in the same way as they manage other occupational H&S risks. It said that, whatever the size of the firm, employers should assess risks and take proportionate action to safeguard their employees from them. HSE has now considered the implications of the group's proposals and reported back to the Health and Safety Commission (HSC), which in turn will report back to the Government, probably later this year. If the task group's proposals are accepted, a standing body should take forward the recommendations and monitor their implementation, with a first report to the Government and HSC in spring 2004.

What will be involved
Bringing work-related road safety under the HSE umbrella will force employers to design new fleet strategies or review existing ones. RoSPA says that the approach needs to be adapted to the circumstances of the organisation and the kind of vehicle use in question. But the underlying principle is that every journey should be planned rather than left to chance. It suggests that it is possible to assess risks by concentrating on the critical features of journeys, vehicles and drivers, to help identify those factors which are likely to increase the probability of accident involvement.

  • Critical features of the journey can include issues such as distance, time, breaks, weather conditions, routes, traffic and pedestrian densities. Time allocated for journeys is critical to avoidance of speeding. Driving hours and breaks are critical factors in avoiding driver fatigue, which is a major but still under-recognised impairment factor.
  • Features of the vehicle can include whether it is 'fit for purpose', roadworthy, and whether it has additional primary safety features such as ABS, or high level brake lights. Secondary safety features such as in-car protection are important, but do not reduce risks to vulnerable road users.
  • Critical features of the driver include age and experience, attitude, health, temporary impairments such as stress and lack of sleep, accident history and overall driving competence.

    Where risk enhancing features cluster together, organisations should review their approach to risk control, says RoSPA.

    The potential financial return of managing driver risks could well outweigh the costs. RoSPA summarises the costs and benefits as follows:

    management time

    management training

    risk assessment

    driver improvement

    accident/incident investigation

    data collection

    control measures

    reduced accident losses

    less lost staff time

    higher staff morale

    improved public image

    lower insurance premiums

    improved 'off the job'

    road safety

    more effective vehicle use

    The savings made on fuel consumption could be dramatic. Training company Drive & Survive says that it is estimated that if every driver in a typical 1,000 car fleet obeyed speed limits, their company would save up to £250,000 a year. Company car drivers who cruise the motorway at 85mph consume 25% more fuel than if they travel at 70 mph.

    Evidence available to RoSPA's Driver Services suggests that the benefit to organisations from simply investing in defensive or advanced driver training for their staff may be a reduction in blameworthy accidents of between 30% and 70% in the first two years. One organisation investing in RoSPA Driver Training over a four year period was able to reduce its fleet vehicle accident frequency from 40 to 9 accidents per million miles, despite a 70% increase in annual mileage. DriveTech, which won the Best Driver Training Company award from the Institute of Transport Management for 2001, estimates that its clients achieve a 30% to 80% reduction in accidents following their training.

    Training may become even more valuable if the UK government proposals to reduce the minimum age for drivers from 17 to 16 years within the next year goes ahead. DriveTech (UK) warns that fleets must not regard these proposals as a cheap recruitment route but should embrace the safety ethos.

    Sue Copeman is editor, StrategicRISK

    The Work-related Road Safety Task Group recommendations included:

  • a DTLR/HSE joint research programme on at-work road safety issues, such as causation, practicability and effectiveness of management intervention, and human factors
  • more rigorous application of existing health and safety at work law to on-the-road work activities, including occupational driving
  • based on their risk assessments, employers introducing measures to manage road safety within their existing health and safety management systems
  • at the next review of RIDDOR (injury reporting regulations), considering how at-work road traffic casualties should be reported to enforcing authorities.

    The report, Reducing at-work road traffic incidents, can be obtained online at:

    Marc McGloon of BSM, chairman of AIRMIC's motor special interest group, says now is a good time for fleet risk managers to review the alternatives to traditional cover

    Motor fleet risk managers find themselves operating in a rapidly changing and in many ways hostile environment. They will need to adapt their operating practices to keep pace.

    The current state of the insurance markets increases the temptation for companies to pull business away from the market, underwrite the risks internally where feasible or consider alternative risk transfer solutions, including finite risk programmes and risk securitisation. Losses underwritten internally may be funded by captives or separate on-balance sheet ring fenced funds. The latter's advantages are lower running costs and that they do not attract insurance premium tax (IPT).

    The advantages of self insurance are:

  • the policyholder controls payments for losses - there are no policy conditions to fall foul of
  • there is a stability in reserves set aside against losses, ie the company is protected against premium volatility where there has not been an increase in loss settlements
  • losses are funded on the date of settlement, as opposed to a premium being paid at the start of the insurance year, resulting in cash flow benefits
  • avoidance of IPT where a captive is not involved.

    Finite risk provides a fixed fund which operates over a number of years, usually subject to deductibles and caps being applied to each claim against the fund. The programme should be structured in such a way that premium payments are tax deductible. The advantages are:

  • financing for losses is spread throughout the period of the programme
  • premium payments into the programme are flexible, subject to the fund being fully supported
  • a rebate can be given against the remaining balance of the fund at the expiry date, if applicable.
  • the programme may be extended to include other non traditional risks such as damage to reputation, (eg a company's reputation being damaged as a result of a motor accident).

    Risk securitisation could involve the conversion of part of a fleet risk between defined limits (loss ratios) into a bond. The advantages of securitisation include:

  • the risk (within the defined limits) is underwritten by the investors in the bond
  • the risk is transferred to the capital markets, removing the concern over funding capacities.

    As the traditional insurance market hardens, alternative risk transfer products become more relevant and feasible for the fleet risk financing programme.