Business owners who operate a fleet of one or more vehicles know that commercial auto insurance can be pricey. The reasons vary, from higher liability judgments to the number of miles logged and the unusual exposures. The fact is, commercial auto insurance can become a hefty part of your budget if you don’t monitor it. But with proper risk management, you can not only save premium dollars, you can also prevent hidden business costs caused by claims, damage to your reputation, and tragic loss.

Let’s analyze some strategies that can go a long way toward minimizing claims and reducing your insurance costs:

Run random drug tests

In addition to ordering annual motor vehicle reports on your drivers (which, of course, you are already doing), you should consider random drug testing as well. Sure, this costs money, but its money well spent. In the current environment, there is no gray area in a courtroom when a judge or jury sees that your impaired employee seriously injured or killed another person. Think it doesn’t happen? Think again. I have seen a case in which a driver for an auto parts business hit a pedestrian (who happened to be on the sidewalk) at 8 a.m. because he was driving under the influence of drugs. How would you like to take that call? Unfortunately, some employers feel that what an employee does on his or her own time is a private matter. But the reality is that your business survival is your responsibility, and you are liable for the actions of anyone who gets behind the wheel of one of your autos.

Know where your vehicle is when it clocks out at night

Many businesses allow employees to take company trucks or cars home with them. If you do, make sure you have a written policy regarding the use of your firm’s vehicles. Your driver may be responsible, but what if his or her spouse or children are not? You must have a written policy that leaves no doubt that use by anyone other than your employee is prohibited and that the employee’s use must be only for business purposes. I know of a business that is looking at installing GPS to monitor where its vehicles are 24/7. An insurance company may be willing to give credit for that type of protection.

Give safety awards

Many companies have found that offering incentives to drivers for safety performance can be instrumental in lowering claims. The incentives don’t have to be monetary. Consider options like extra vacation time, gift certificates for dinner, tickets to sporting events, and recognition in the company newsletter or local newspaper.

Reduce distracted driving

This might be the most important step you can take. According to the National Highway Traffic Safety Administration, 50 percent of all accidents are caused by distracted drivers. What distracts a driver on the road? How about using a cellular phone, eating or drinking, checking directions, smoking, or playing with the radio? All of these actions increase the likelihood of an accident. You must take measures to require that your drivers avoid such distractions. What’s more — and here’s the harder part — you have to avoid these distractions, too. You lead by example, and your employees are more likely to follow your guidelines if you hold to them yourself. By the way, using a cell phone while driving has now caught up to driving under the influence when it comes to the probability of being involved in an accident.

These actions may cost you time and money, be inconvenient, and in some cases even cause pain — but the greater pain can occur if you don’t manage your firm’s risks. It is your responsibility as the fleet owner to do everything possible to ensure the safety of your drivers and the public while your vehicles are on the road. Compensatory and punitive damages await those who do not take precautions. In contrast, better fleet management has the potential to save you premium dollars, keep you out of a courtroom, and, most important, help your employees and others make it safely back home at the end of the day.

(Editor’s Note: Dan Weedin, CIC, is founder and president of Toro Insurance Consultants, Inc. He holds the designation of Certified Insurance Counselor (CIC) from the Society of CIC. He can be reached at (360) 697-1058 or dan@toroinsurance.com.).