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Companies sleepwalk into cash crisis as they fail to appreciate cost of road crashes

12 December 2008

Road traffic crashes in Britain costbillions of poundslast year with much of the cost borne by businesses in terms of lost output and administrative costs.

Yet, many companies are ‘sleepwalking’ into danger because they fail to appreciate both the final multi-million cost of each road crash in addition to the legal costs.

The dripping tap of costs associated with at-work road crashes is one of the most straightforward to turn off, according to Fleet Support Group and crucial as companies across the board look to safeguard their future by eliminating costs as recession bites.

Companies that have introduced RiskMaster, the company’s one-stop shop approach to occupational road risk management, have reaped significant financial savings.

But, said FSG Chairman Geoffrey Bray: “Many companies at the top level continue to resist buying into crash prevention. Yet, the law puts these directors and company managers firmly in the spotlight in the event of a crash.

“We are aware of many fleet managers who find the attitude of their boards of directors and immediate bosses very frustrating. Fleet managers know that the proactive implementation of occupational road risk management initiatives is a business essential.

“However, such measures are being resisted by short-sighted boards of directors. That is appalling, but it is happening.”

And, employment law specialist Kevin Basnett, Senior Partner at Goughs Solicitors and an adviser to FSG, warned: “Directors should not be setting fleet managers up to fail, but backing them up to drive down costs, change culture and general behaviour. Improving at-work driving safety is about top down, bottom up linkage and communication is key.”

In the event of a road crash, investigating police officers will want to see comprehensive details of a company’s safe-driving procedures including records of how they manage drivers, vehicles and journeys.

All such data is recorded within FSG’s RiskMaster programme and builds into a Driver Operator Life Report. But a failure of businesses to implement such measures leaves the business and its directors and managers wide open to prosecution under health and safety legislation as well as the Corporate Homicide and Corporate Manslaughter Act.

Companies that have introduced RiskMaster are reaping the doubled-edged benefits of saving money and having in their possession a comprehensive audit of drivers, vehicles and journeys that they can produce as evidence to defend themselves against any possible legal proceedings.

“Managing work-related road safety is not a cost, it is an investment,” said Mr Bray. “Road crashes are devastating for families, friends, businesses and work colleagues, but effective action can be taken to prevent tragedies from happening.”

Data contained in the Department for Transport’s ‘Road Casualty Statistics Great Britain: 2007 Annual Report’ reveals that: Last year there were 2,946 fatalities on the country’s roads costing an average £1.87 million; the 27,774 serious injuries cost an average £215,170 and the 217,060 slight injuries cost an average £22,230.

However, add in the costs associated with lost output, medical, ambulance and police care and time, property damage and insurance and administration and, according to the Government, the average cost of crashes soars to: £5.09 million per fatality, £5.23 million per serious injury incident - the cost is higher than a fatal due to the continuing need of ongoing medical care and other associated costs - and £3.45 million per slight injury crash.

Mr Bray added: “Companies that use RiskMaster have an appetite for data and an appetite to cut costs. Using the Riskmaster information will result in costs reducing and legal compliance will be absolute. In the economic climate that we are currently experiencing no business can avoid measures that reduce cost.”

The original version of this article was featured in FSG UK's monthley Flagship publication.

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