Pub. 61 2020-2021 Issue 4

21 SUMMER 2021 dealer has, the greater the chance of having a severe loss. The key is to avoid auto accidents and lessen the possibility of having that severe loss. We have loss control suggestions and programs in place to help address these concerns. Multiple factors create large claims: a questionable driver with a poor driving record may cause an accident, numerous high-end vehicles could be involved, or an accident caused loss of life and multiple trauma injuries. As an insurance company, large claims keep us up at night, and they should also be of concern to the dealers. We work with dealers to help mitigate their driving exposure. If a loss becomes a large claim, it can become a high-profile, newsworthy item for public consumption. The resulting negative publicity can harm both a dealer’s brand and image. What are some loss prevention techniques dealers can employ? Risk management is crucial to lessening the exposure to auto claims. A partial list of things to do includes the following suggestions: • Dealerships and vehicles go together. Allowing employees to drive brings up some unique challenges for any business. Dealerships should be concerned about conditions such as the driving record of any employee who uses a dealer vehicle, the status of their driver’s license, and whether any needed certifications are up-to-date. • Preferred practices are important to safeguard a dealership. First, develop a written vehicle safety program. The program should include: ▪ a statement setting the standards for safe driving by employees ▪ a motor vehicle record (MVR) authorization form ▪ written guidelines for regular MVR checks ▪ clearly defined driver acceptability standards ▪ drug and alcohol testing ▪ prohibitions on cellphone use while driving • Take time to consider how service test drives and customer demos are performed. Have a designated route established that follows the path of least resistance. Avoid multiple lane changes and cross- traffic turns. Increase visibility by requiring headlights to be on at all times while on the road. • Above all, don’t go it alone. An experienced insurance company can help manage specific loss-producing situations and avoid needless accidents. We have many other loss-control suggestions. Talk with your loss-control representative or sales professional for more information. What else would you recommend? From a direct insurance cost standpoint, dealers should also consider higher deductibles and lower limits. More often than not, a commercial policy carrying high limits and low deductibles will be extremely expensive. You can usually find significant cost savings by making deductible and limit changes to a commercial insurance policy. Any last words? A dealership might get away with doing something nine times out of 10, but that 10th time could cripple the business and create a major news story on the internet. There is so much on the line. Dealerships support employees and their families. In many cases, a dealership may be a legacy business passed through generations in one family. Also, many dealerships are cornerstones in their communities, supporting customers and neighbors. Statistics prove that the dealers with safe driving practices in place fare better than dealers who don’t. Enforcing a solid risk management plan reduces a dealership’s exposure to both frequency and severity. As a result, dealerships are more likely to avoid a crippling loss as their exposure decreases. And that makes them safer and more financially secure. 