With the hard work of workers’ compensation risk management finally paying off, as proven by a steady decline in claim frequency, it’s that much more alarming when rates of one of the costliest claims—motor vehicle accidents (MVAs)—start climbing. A recent National Council on Compensation Insurance (NCCI®) study shows MVA claim frequency took a sudden upward turn in 2011 across all major industry groups, tracking with the overall MVA trend in the general population. Claim severity is increasing too, says the study, with MVAs exceeding the severity of all workers’ compensation claims combined.
Understanding what’s behind the trend can assist employers in acting to help protect their employees. Like many loss-control issues the industry has taken on, containing this one will require a combination of technology, employee training and education, and management
MVAS GROWING DISPROPORTIONATELY TO OTHER WORKERS’ COMP CLAIMS
The NCCI study confirms that while workers’ compensation claim frequency has been steadily declining, MVA claims have been increasing in frequency since 2011, and they cost more:
- From 2011 to 2016, the frequency of all claims declined by 17.6%, while the frequency of MVA claims increased by 5%.
- MVA claims represented nearly 6% of claims and nearly 12% of total losses, since MVA claims involve more serious injuries.
- 41% of fatal workers’ compensation claims were the result of an MVA.
- MVA claims cost 80–100% more than the average claim, due to the severity of the injuries sustained.
Logic dictates that people driving for business can’t be the only ones having more traffic accidents, and the NCCI study bears this out. The findings were consistent with the National Highway Traffic Safety Administration report showing a similar increase in traffic crash injuries per vehicle mile traveled and per population since 2011.
The pervasiveness of road accidents makes it unsurprising that most industry classes are affected. The NCCI study points out that while, predictably, trucking classes and taxis showed the largest increase in accident frequency, 25 of the top 30 classes (as ranked by each class’s share of MVA claims) experienced an increase. The problem hasn’t gone unnoticed by employers: workers’ compensation claim managers and risk managers named “distracted drivers and auto collisions” as one of their top 10 challenges for 2019 in a survey conducted by Risk & Insurance. Their response indicates they’ve already zeroed in on the primary culprit: distracted driving.
MORE CARS ON THE ROAD WITH MORE DISTRACTED DRIVERS
The statistics beg the question: What started happening in 2011? Just when vehicle safety technology improvements became standard in more vehicles, to the point where they could have made a difference, a recovering economy put more cars on the road and more smart phones in the hands of drivers. Technologies such as adaptive cruise control, automatic front and rear breaking, and lane departure and blind spot warnings haven’t been able to offset the impact of distractions. Other factors, such as increased speed limits, marijuana legalization, and more elderly drivers on the road, only exacerbated the situation.
According to the National Safety Council, using a cell phone while driving caused an estimated 1.5 million car accidents in the U.S. in 2018, and that number is probably underreported. Even hands-free devices and the laws enforcing their use in certain jurisdictions have not had much of an impact. As companies with any number of employees driving on business know, controlling how someone else drives is no easy task.
WHAT EMPLOYERS CAN DO
As with other workers’ compensation loss challenges, reducing MVA losses starts with a study of the facts. Employers, with the help of their brokers, can start with an assessment of the full extent of their exposure, including their non-company vehicle exposure, suggests OSHA. Employers should consider all employee drivers—even occasional drivers who are not assigned a company vehicle.
Since making improvements, whether through more vehicle safety improvement technology or employee training, may require some investment, employers might need to prove return-on-investment spending. OSHA provides a worksheet that helps employers
calculate the direct and indirect costs of MVAs to their business and help prove the return on investments in technology, training, and other preventative measures.
Other steps employers can take:
Blocking technology: The National Safety Council says hands-free phone usage isn’t nearly as effective as apps that block smartphone functions while a vehicle is in motion. This cell phone blocking technology is becoming increasingly sophisticated—some can even block audio features (such as the ability to speak on the phone or listen to a podcast) as well as track vehicle speeds.
Change driver behavior: Employers should have a robust safe driving program in place. Resources abound to help, such as the Network of Employers for Traffic Safety 10-Step Program. OSHA recommends that these topics be addressed: seat belt use, distracted driving, alcohol and impaired driving, fatigued driving, and aggressive driving.
Follow First Notice of Loss (FNOL) best practices: FNOL can help employers determine whether an accident was preventable. Employees involved in accidents should provide details on the location of the incident as well as the weather and road and traffic conditions. Employers should supplement inquiries with information from unbiased third-party witnesses and police reports.
THE OUTLOOK ISN’T ENTIRELY BLEAK
Some industry experts predict that many of the traffic accident causes and factors discussed here will eventually level out, and the increased penetration of collision avoidance technology will lead to a decline in motor vehicle accident rates by the 2030s. But even with that optimistic view, employers should act now to protect their employees and others on the road. Workers’ compensation risk management efforts have systematically reduced virtually all types of on-the-job accidents over the years, and driving should be no exception.