Accident management - in or out?
17 March 2020
Author: Sean Keywood
Sean Keywood looks at the right approach to a high-stakes area of running a fleet.
It is hard to think of a more potentially stressful time to be a fleet manager than in the aftermath of an accident involving one of your drivers. Even leaving aside the potential for injury to those involved, there is a whole maelstrom of possible legal and administrative issues to consider.
The obvious answer seems to be to hand over the responsibility to an external specialist and let them take care of it, but is that always the right approach? And what are the other major issues fleets need to watch out for, whether they outsource accident management or go it alone?
Despite working for one of the external providers, Stuart Thomas, director of fleet and SME services at the AA, doesn't just advocate outsourcing as the default position for every fleet - although he does say a high level of internal competence is required to go it alone.
"If you have got the scale and an in-house department with the expertise, I won't throw stones at that," he says. "The advantages we bring, when we look at clients and go through a consultancy basis with them, is we have the critical mass, we have got the expertise, we have got the systems and the networks to deliver on cost control, cost certainty and low downtime, and I think those should be the benchmarks.
"It shouldn't be about whether you in-house it or outsource it, it should be about what is most effective."
Thomas says a fleet handling accident management internally, as well as having the relevant expertise, needs to make sure it has the right maintenance network in place to back it up, which has its own complications.
"Who is managing the network for you? Who is auditing the repairers? Who is auditing and underwriting the repairs?", he says.
"If you are trying to do that on a smallish scale, then you just won't get the economies of scale or the level of expertise."
Will Wycks, global marketing director for fleet software firm Chevin, also warns that the level of expertise an organisation has is crucial.
"It depends on competence in-house," he says. "It is quite a specialised area, so that is where people like to invest in an in-house specialist to look at insurance or manage claims. Not everyone has that sort of expertise for claims handling, or legal expertise.
"I wouldn't say we steer people in-house or externally, but we make it quite clear what they need to be aware of depending on the business and their strategy."
Wycks says that Chevin finds customers' facilities also play a part in the decision.
"They can go one way or another depending on things like infrastructure," he notes. "Some clients like councils and emergency services have workshops in-house and want to manage that repair."
Wycks says Chevin's accident management software also supports what he calls a hybrid approach, where fleets might for instance opt to outsource repairs, but keep everything else in-house.
One thing that is clear about accident management is it is not an area where fleets want to be making mistakes. Acfo chair Caroline Sandall warns that fleets must make sure vehicles are repaired in line with required standards, and that effective management of third parties is key to limit any legal action, while Thomas warns that other pitfalls include increased downtime and costs, and potential ongoing issues arising from a poor repair.
If a fleet does decide to work with an external provider, Sandall - who says that even with outsourcing, a degree of in-house oversight and governance will still be required - believes choosing the right supplier should be a
"Reputation is key, and fleets should closely examine performance, and assess processes and checkpoints," she says.
"Look for case studies, take up references, examine successes and failures, or issues, and how they were overcome.
"Fleets need providers who can handle all scenarios, dealing with drivers promptly and efficiently, get vehicles back on the road as quickly as possible, and manage claims effectively through to conclusion, working with insurers."
Thomas agrees, saying: "Make sure you go through a process of choosing a supplier, and do it in a way that allows you to benchmark the value they bring to you as a business, and that they deliver on KPIs."
For Wycks, fleets also need access to their data, which Chevin can provide to them, even if they choose to work with an external supplier.
"From our perspective it is making sure they can access the data and it is not managed and controlled by the third party," he explains. "Data is so key in managing the claim and repair process, and trying to mitigate [accidents] happening in the future.
"If you are running a fleet of thousands you can get some good intelligence to run campaigns, to alert to potholes, or whatever it might be."
Wycks also says that fleets need to consider which provider best matches up with their
"Some providers have survived on a model that encourages accidents to happen, as they make their profit from repairing an accident", he says. "There are other external providers that are changing the model to make profit not from the accident but from the speed of repair.
"So we get involved in these discussions to say it is all about objectives. Are you trying to provide less downtime, or a better service? It might be best for the driver to put them in a [like for like] car, and that is a different approach."
On the subject of whether smaller or larger fleets would be better off going in-house or external, Thomas believes this is another area where specific fleet requirements come into play.
"A customer did say to me one size fits nobody," he says. "I think what they are trying to say is that there might be a generic type of requirement but it is vitally important to ensure it fits you as a business.
"How are you insured? What type of vehicles are you running? If you are in specialist vehicles, you are going to need specialist repairers. There might be an opportunity, and this is not necessarily about scale, about how you salvage the parts from those vehicles, to repair other vehicles.
"So I think while network, repair, keeping costs down and managing downtime are all generic, thinking one fleet is like another fleet is a slippery slope.
"It is important to understand what those vehicles are used for, how they are built, and therefore what you are going to need to deliver the cost competitiveness."
When asked if in-car technology such as dash cams and telematics can help with accident management, Thomas says this is something else that depends on the individual fleet.
"There are a lot of benefits in terms of speed of claim - you are not going through this type of blame game," he explains. "There are a lot of benefits for us on an operational fleet.
"But then you have got to manage that, and there is the cost of installing it versus the benefits you get from it.
"For operational fleets I think technology is vital, and cameras are a massive benefit. For other fleets that might not be as clear, but I think every fleet should look at those types of solutions and see the benefits they can get from them."
Sandall adds: "Telematics offer widely recognised benefits in understanding the risk points and drivers that may require further support to reduce risk.
"Additionally, [they offer] the ability to check and confirm the circumstances surrounding an accident, which is also where dash cams can be of great use."
For Thomas, fleets' number one area of concern should be their duty of care to the employee involved in the accident, and risk mitigation, followed by operational effectiveness and cost control.
"Nobody wants an accident, and in the personal world I don't think there is a lot of thought when you run a car about what would happen if you have a crash, but you wouldn't drive a car without insurance," he says.
"In the same way, when you run a business, if your computer systems went down, you would have some type of management for that, so if one of your cars goes down you should have a facility to make sure you can get them back up and be effective. It should be no different in that mentality to running your business."
Looking to the future, Thomas says one development fleets need to be aware of is the pending implementation by the government of the Civil Liability Act 2018, which will limit claims for whiplash and raise the limit for small claims court cases from £1,000 to £5,000, which Thomas says will affect how some other providers operate.
Looking further ahead, Acfo's Sandall says developing vehicle technology may also have an impact.
"Autonomous vehicles will bring considerable change in the long term," she says. "It is not yet fully understood where liability will lie, and how policy and process will need to change to manage this.
"It will also be interesting to monitor further changes to the repair process itself, and increased control over use and disposal of plastics and other materials."