The ROI of Implementing a Safety Program

December 3, 2012

Motor vehicle accidents kill 35,000 people in the United States every year, making them the leading cause of unintentional death in the country. Vehicle accidents can be caused by many things—mechanical failure, environmental factors—but the leading cause is human error. Auto Alliance estimates that human error is the probable cause of 93% of all accidents. Implementing a safety program can help reduce those human errors.

Correlation Between Safety Training and Accidents

Vehicle accidents also have a major impact on employers. According to the National Highway Traffic Safety Association, the average accident costs an employer $16,500 in damage to the vehicle, litigation, driver downtime, lost productivity, and workers compensation claims. Implementing a safety program can deliver several benefits including:

  • Lower accident rate
  • Fewer violations
  • Reduction in litigation exposure
  • Fewer workers compensation claims
  • Reduced accident severity
  • Smaller insurance premiums

Every fleet is different, so the exact savings a fleet could realize from implementing a safety program could vary based on its current accident rate and the effectiveness of its own safety program.  ARI surveyed several of our clients in 2011 and found a direct correlation between the number of safety training modules assigned to drivers and the number of MVR violations and accidents they incur. With that in mind, the savings should range from between 10% to 30%.

Accident Statistics

According to NHTSA, the average on-the-job crash costs an employer about $16,500 or just under $0.16 per mile driven. Crashes involving injuries cost substantially more -- $504,408 for a fatal injury and $73,750 for a nonfatal injury.  The following are the cost elements:

  • Damage to vehicle
  • Litigation
  • Driver Downtime
  • Loss of productivity
  • Workers compensation

Preventable versus Non-preventable Accidents

  • Preventable – 30%
  • Non Preventable 70%

Best Practices for Safety and Accidents

The following recommendations related to driver safety and accidents come from ARI's 2012 Best Practices:.

  • MVR Checks - Perform during the employment screening process and at least once a year for every driver in the fleet, including eligible non-employee drivers if applicable.
  • Managing Medium- and High-Risk Drivers - Modify their behavior through supplemental means to reduce the likelihood of potential accidents and litigation.
  • Driver Training - Conduct formal driver training upon employment and supplemental safety awareness regularly to increase safe driving and to reduce litigation exposure.
  • Cell Phone Use - Prohibit talking, texting, emailing, and any other type of cell phone use in a moving vehicle. While some states allow the use of hands-free devices, we recommend disallowing the use of any electronics while operating a company vehicle.
  • DUI Offense - Inform Human Resources immediately upon a summons being issued. A conviction should result in the loss of a company vehicle for three years from conviction date or possible termination.
  • Safety and Compliance - Ensure drivers are compliant with DOT regulations for safety and fuel tax reporting. A formal DOT program should be in place with an appropriate manager responsible for compliance.
  • Hazard Perception Evaluation - Testing drivers on their ability to anticipate events via simulation will reduce exposure to preventable accidents.