If your company’s CFO isn’t making recommendations about how to keep the cost of car accidents down, they’re missing an important opportunity to improve one of your company’s financial weaknesses.
Any company that uses company cars, trucks, or has employees who conduct work-related business in their own vehicles takes a huge financial risk each time one of their workers gets behind the wheel. The more often company-related accidents happen, the higher your workers’ compensation insurance coverage and health insurance benefits will be. On top of this, you may also have to foot the bills for repairing or replacing damaged vehicles and a record on the California traffic ticket database.
How Accidents Affect Health Insurance Premiums
Your employee’s accident does not have to happen during the course of their work duties for it to cost the company money. According to the National Safety Council (NSC), 80% of employer healthcare benefits costs are related to vehicle accidents that take place off the clock. The NSC also stated that a fatal accident can cost more than $1 million for each death, and a non-fatal accident can cost $7,000 per injured person.
On top of these costs, companies are directly impacted by work that is lost when an employee is injured. Approximately 53% of vehicle accident injuries cause the injured party to miss work. Lost man-hours and lost productivity cost employers money. On top of the lost productivity, you will still have to pay the injured worker for their sick days as well. You may also have to hire a temporary employee to take their place.
When an employee is in a fatal accident, of course the costs to the company are not the first thing that comes to mind. However, it is a harsh economic reality that is worth considering and discussing. If an employee dies, they will need to be replaced. Training a new person costs time and money, and it will also hurt your productivity.
How Accidents Affect Workers’ Compensation Insurance Premiums
Vehicle accident claims in the United States have been increasing over the last five years, and now they are at the highest they’ve been in a decade. The rate of claims can seriously hurt your company’s bottom line. The more accidents your employees are involved in, the higher your premiums will be. Each injury or fatal accident could cause your rates to go up by 33%. Even an accident that does not result in injuries can cause your premiums to go up by 23%.
Because of the high cost of vehicle accidents, many companies have made the decision to mandate driver safety programs and motor vehicle record (MVR) checks for any employees that use company-owned vehicles. This can result in a reduction of the number of accidents, but is it enough?
What Companies Can Do to Cut Accident-Related Costs
Employers have the opportunity to reduce the rates of vehicle accidents and possibly even saving their employees’ lives by taking proactive steps to provide individualized training to their workers whose jobs include driving.
One way you can lower accident rates is to implement a fixed variable rate (FAVR) reimbursement plan. This program reimburses employees for expenses related to driving their own vehicles for work-related purposes. It can help your company to differentiate between accidents that happen during the course of job duties and those that did not.
Some companies are offering their employees defensive driving classes. These can reduce the number of accidents in all of your workers and not just those who use company vehicles, which means it can help keep your insurance premiums down.
Another way you can cut the costs of accidents is to pursue lawsuits against the other party when the crash was not your employee’s fault. If the at-fault party is held accountable for their negligence, they will have to cover your worker’s medical bills and the cost of replacing the vehicle, along with any other associated damages. You can visit this website to learn more about how you can recover damages after a car crash.
Doing everything you can to lower the vehicle accident rate saves lives and profits. If your company isn’t already doing this, it’s time to start to recover damages after a car crash
