It should be as clear as the road in front of you. Professional driver contracting and ongoing monitoring goes a long way toward enhancing your safety record and minimizing costs associated with motor vehicle losses.
MVR: 'Most Valuable Record'
The single most valuable tool you have to identify reckless and "unlucky" drivers before they jeopardize your insurance record is the MVR - really the 'Motor Vehicle Report," a.k.a. driving record. How useful are MVRs for screening drivers?
How do you obtain driver MVRs? In your ads, tell applicants to bring you an up-to-date MVR. Drivers can get their own at any local Motor Vehicle Office. Consider signing up with an online MVR service to gain the ability to order them yourself - the time and hassle saved will more than offset the fees. (Your insurance broker can probably order and review MVRs for you, too.)
While the ideal candidate has a "clean" driving record (i.e., no moving violations or at-fault accidents), the insurance and delivery industries have developed more realistic but still effective standards. Some couriers will not contract drivers with more than two or three accidents. Others accept only a certain number of "points" (note however that different states use different point systems).
In general, make sure all drivers receive a copy of your standards and understand them. If you only charge for "at-fault" accidents, remember that drivers are responsible for documenting that accidents were not their fault (for example, by producing a police report). Finally, do not let drivers on the road with suspended licenses, even if the cause seems to be unpaid parking tickets. Have the driver pay the fines and obtain proof of license reinstatement.
For Owner-Ops Only
When contracting drivers who will use their own vehicles - either as independent contractors or employees - two further checks are in order. The first involves vehicle inspection. Some services have very high standards for appearance as well as maintenance, while others merely desire "working" vehicles.
Regardless, at minimum an experienced manager should examine the vehicle's exterior, interior, and underside for such things as adequate tire tread and shocks, working windshield wipers and dashboard lights, and the absence of fluid leaks or loose exhaust pipes. It is useful to have a Vehicle Inspection Checklist to guide the manager and facilitate documentation. While many commercial checklists focus on trucks, more appropriate forms can be found.
Also, a driver's insurance is an indicator of his/her attitude toward risk and responsibility, plus respect for the law. It also is a critical line of defense against corporate liability in the event of an accident. The more insurance carried by a driver, the less likely it is that your company will get drawn into a lawsuit and have to make a large insurance claim. Many delivery companies simply ask for proof of insurance - often an insurance ID card. ID cards show the name of the insurance company and the expiration date of the policy, but they don't normally show the limits of insurance carried by the driver.
Liability limits are clearly important - choose drivers with higher limits whenever possible - and should be documented on your driver spreadsheet. I recommend setting the minimum standard for liability limits at 100/300/50. These "split limits" mean that in the event of an accident the policy will pay $100,000 per person injured, $300,000 for all injuries, and $50,000 for property damage. Statistics show that such limits are usually sufficient for all but major crashes. Also, the additional premiums are reasonable - often about $200 per year.
Many drivers carry insurance limits of 100/300/50 or higher on their own, but sometimes it can seem difficult to find qualified drivers willing to pay for anything above your state's mandatory 28 minimum insurance limits. In the past, several of the most attractive insurance programs insisted on standards of 100/300/50, but this is no longer the case. Still, companies with higher standards typically pay lower rates.
The Good Versus The Best
Setting minimum standards tends to focus us on those minimums, obscuring the benefits of exceeding the minimums whenever possible. For example, we may prefer to hire drivers age 25 and older but decide that a realistic minimum is age 21. Once published, the "21 standard" takes over and managers easily forget the original goal of 25+. Realistic minimum hiring standards are necessary and desirable, but should not overshadow more ambitious goals. Consider adopting "Preferred Standards" or "Hiring Goals" alongside your minimum requirements, and set a percentage of new hires that should meet these loftier criteria.
For example, the Preferred Standard for driver MVRs could be a "clean record," and at least 50 percent of new hires should meet this standard. A clean record would not be realistic as a minimum requirement for all drivers, but should remain the targeted goal.
Several safety-related criteria should guide your choices when contracting new drivers. Driver age, experience, references and driving records provide valuable information that can help you avoid populating your driver pool with "accidents-waiting-to-happen." Having implemented a more professional process of driver hiring, it would be tempting to relax, thinking that your job is done. However, several of these standards need to be monitored over time to make sure that driver behavior does not change on the job. Create a monitoring schedule to specify how often each area is to be checked, who is responsible and what standards will be used (minimum and preferred).
Specifically, the areas to be monitored include driver MVRs (we recommend running reports every six months for all drivers), vehicle condition (we recommend documented pre-winter inspections), and driver insurance (at expiration date).
Note that it will be useful to maintain a central file for all of your drivers' most recent MVRs, instead of inserting them into each individual driver file. Insurance companies and risk managers often wish to review MVRs and it's much easier to pull a dedicated file than to extract sheets from each personnel folder.
Loss Control = Cost Control!
It's true insurance cannot eliminate disruptions caused by losses, nor prevent bad press or salvage a damaged reputation. However, your risk strategy can be the great equalizer! Your business benefits most by not having losses in the first place or, failing that, by minimizing the seriousness of any losses that do occur.
In this uncertain, uncontrollable world, to speak of 'controlling' losses might seem ambitious, but an overwhelming number of studies show that Loss Control strategies do work. Companies have drastically cut down losses following the implementation of safety programs.
Over the past decade, even the insurance industry has come to recognize the value of Loss Control by increasing discounts and making available resources to help you launch or improve your risk strategy. If you are unhappy with your insurance rates, chances are revisiting your Loss-Control plan will pay dividends for you and your drivers down the road!