Having drivers on the road brings an internal risk for all companies and drivers. There is always a chance a driver can be in an accident, the question is, what risk does my company have? It is essential to protect your company from liabilities and financial risks associated with employees on the road. There are two main approaches when evaluating risk management– avoiding risk and mitigating risk.
There are many approaches companies may utilize to mitigate risk. For example, risk mitigation may include a compliance policy for seatbelt use, and cell phone use, and limits on the personal use of company-owned fleet vehicles. While risk mitigation certainly helps reduce company liability, it does not provide a liability shield for your business. It is essential to implement safe driving policies and reduce liability for all businesses. A Fixed and Variable Rate (FAVR) Program can help with this.
How a Fixed and Variable Rate (FAVR) Program can help with risk management
According to Bankrate.com using data from the National Highway Traffic Safety Administration (NHTSA), approximately 2.93 million motor vehicle accidents occurred outside the regular working hours of 6 AM to 6 PM in 2019. Total accidents in 2019 were approximately 6.75 million. This means companies that have a Fixed and Variable Rate (FAVR) Program can avoid approximately 43% of the risk compared to a company-owned fleet which has risk exposure 24/7. Furthermore, compared to a company-owned fleet vehicle, a FAVR program only exposes a company’s liability during the driver’s working hours.
At AutoReimbursement.com, we collect and verify driver’s insurance and license. This also furthers the number of steps taken to assist companies with risk management in their vehicle reimbursement program.
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