Three Key Elements in A Fleet Safety Program for Plumbers and HVAC Contractors

Author, Matt Gorham, Account Executive, Rancho Mesa Insurance Services, Inc.

Commercial auto insurance continues to be problematic for plumbers and HVAC contractors as skyrocketing premiums are eroding profitability.

Unfortunately, indicators show that this trend will continue for the foreseeable future. For the 14th consecutive year, commercial auto has posted an underwriting loss, while just the last two years have developed more than $10 billion combined in net underwriting losses.

The primary driver behind these poor results is auto liability. Fueled by third-party litigation funding, social engineering, and shifting views of corporate responsibility, nuclear verdicts have upended the auto insurance marketplace, causing many carriers to re-evaluate their willingness to even offer commercial policies.

For those carriers that are still writing commercial auto, higher premiums and tighter underwriting guidelines are now standard. Along with closer scrutiny of claims history, the quality of a written fleet safety program has become critical to carriers who typically compete in the plumbing and HVAC insurance space.

While there are many components to a strong fleet safety program, there are three key elements that should be included:

1. Personal Use Policy

A company’s personal use policy specifies whether company vehicles may be used outside of work duties, under which circumstances, whether non-employee passengers are allowed, who may drive the vehicle, and whether trailers or recreational equipment may be attached.

A personal use policy may also address whether a company’s employees’ vehicles or non-company vehicles may be used in the course of work, minimum standards for vehicle condition, maintenance regularity and documentation, and personal insurance limits that must be met.

2. Alcohol and Substance Abuse Policy

Alcohol and substance abuse policies outline expectations and consequences for drivers regarding the consumption, possession, or distribution of alcohol, recreational drugs, or illegal substances. These policies will often include drug testing requirements, such as prior to being selected as a driver, random, post-accident, or reasonable suspicion testing.

3. Distracted Driving Policy

Distracted driving policies emphasize the importance of attentive driving and prohibit or limit the use of cell phones, tablets, or other electronic devices. They may also address other activities that divert attention away from driving, such as eating, putting on makeup, getting dressed, or reading while driving.

Specific policies may also be developed in more detail to address hands free cell phone use, practices for looking up directions, or the use of technology that screens cell phone usage.

For these policies to be most effective, it is important for drivers to not only be aware of the policies but to clearly understand them. Discussing these policies with new drivers and periodically throughout the year with all drivers will keep them relevant.

In support of plumbing and HVAC contractors, Rancho Mesa has developed a library of weekly driver-specific safety toolbox talks, providing key topics to further conversations about safe driving practices. The extensive safety library is accessible within the SafetyOne™ platform and by subscribing to the weekly Driver-Specific Toolbox Talk emails.. SafetyOne also provides the tools necessary to implement a company’s Fleet Safety Program.

Another crucial factor that determines the effectiveness of these policies is consistent enforcement. When drivers understand that there are consequences for breaking company rules, they are more likely to adhere to them, especially if their livelihood is at stake.

While cameras, GPS tracking, and telematics have gotten a lot of attention in recent years, these tools, while powerful, simply provide information. Cameras do not make drivers better; they just show what drivers are doing behind the wheel. Similarly, GPS and telematics do not make a driver safer; they just show where vehicles are and how fast they are being driven. The company must review the data and take action, when needed, to ensure these tools are effective.

Defining, discussing, and enforcing clear policies that govern the safe use of company vehicles reinforces safe driving habits and decision making by individual drivers. It can also help to create a company culture that elevates the status of drivers, celebrating the fact that driving is a privilege that comes with responsibility.

While auto insurance premiums are expected to continue rising, there are actionable steps that can minimize increases and avoid costly accidents that impact your profitability, your productivity, and your people.

If you have questions about your fleet safety program or want to learn more about the strategies that we are leveraging to help our mechanical contractor clients navigate this challenging market, reach out to me at (619) 486-6554 or mgorham@ranchomesa.com.