Commercial clients should know who’s behind the wheel

Every insurance agent dreads the call from a business owner reporting a major claim. In many of these situations, the business failed to take the steps that could have prevented a loss.

Unfortunately, even astute business owners fail to recognize that the role of insurance is to protect them against losses they are unwilling or unable to cover themselves. The “what’s-insurance-good-for-if-we-don’t-use-it?” attitude pervades the thinking of too many companies. These are often the same insureds that complain the loudest when their insurance carrier sends a non-renewal notice.

Insurance agents can be involved, too. No insurance agent knowingly puts an insured at risk. Just the opposite is true: it’s good business for the insured and for the agent to work at reducing loss ratios. Both are rewarded for acting aggressively when it comes to loss prevention. Insureds benefit from premium cost savings and agents earn compensation for low loss ratios.

Yet, there’s one area where agents may be putting their commercial lines clients at risk. They do it unconsciously and unknowingly, but at risk, nevertheless.

The issue has to do with who gets behind the wheel of a vehicle on company business. More and more employees are driving for their employer and their livelihoods depend on it. If they can’t drive every day, they can’t perform their jobs. Because a driver’s license is so essential, some employees continue driving even with a revoked or suspended license. It’s the same story if they have had an accident or were convicted for driving while intoxicated. Many will just continue driving, ignoring the fact that they no longer have a valid driver’s license.

Unfortunately, they get away with it, at least for a while. Since insurance companies only check driving records once a year, these drivers have a convenient “grace period” to get away with being out of compliance.

Even though the mandatory annual driver’s license records check is a step in the right direction, there are countless stories every year of improperly licensed individuals operating vehicles.

Why does this happen with such frequency? Why are so many people driving even though they are legally prohibited from doing so? What can be done to stop it?

For some, particularly the families of those who have been killed or injured by illegal drivers, the solution is stepped-up enforcement, tougher controls or both. Yet, it’s only fair to ask whether putting more laws on the books is the solution. One struggles to believe that additional legislation could actually improve the situation. At the same time, pleas for increased enforcement seem equally unrealistic, particularly since it would add additional pressure on already overburdened and under-funded law enforcement organizations.

Fortunately, there is an efficient, cost-effective and most importantly, affordable solution. The DMV in New York (and similar agencies in other states) is a veritable warehouse of driver’s license data that’s up-to-date and accurate. Information on accidents, convictions, expirations, pending suspensions, pending revocations, suspensions and revocations is available — as every insurance agent knows. But with the burgeoning number of drivers and the amount of data involved, the issue isn’t current and accurate data availability; the problem is ease of accessibility.

As insurance agents know so well, “pulling DMV reports” once a year to comply with state statutes is a tedious, time-consuming task. The irony is that the mandated once-a-year check is woefully inadequate in the current driving environment, even though the updated data is available 24/7. An annual check provides a brief, momentary snapshot, but what about the other 364 days a year? What is needed is a system that’s more akin to a streaming video, one that is constantly updated and properly organized.

If we expect businesses and governmental organizations, including school bus operators, to be held accountable for making certain that any employee who gets behind the wheel at any time has a valid driver’s license, then continual monitoring is a necessity. It’s also possible.

Each morning, a school bus fleet manager for a New York State school district takes a couple of minutes to access up-to-the-minute driver’s license data on her 30 drivers before handing out keys. She knows that each driver is in compliance that day.

The same is true for businesses. For example, Michele Henkel, Fleet Safety Administrator for Crowley Foods, a major food manufacturer and distributor, says her company “wants clean driver records.” She checks her desktop each day to make sure her 153 drivers have clean records.

How would insurance underwriters react knowing that an insured’s drivers were in compliance at all times? Would they see this as an effective risk reduction measure? The answer is obvious.

Cracking down on improperly licensed drivers doesn’t work. If cracking down were the solution, then drivers with a string of DWIs, suspensions and revocations wouldn’t be on the road. Passing more laws and hiring more police officers isn’t the answer either, particularly at a time when reducing costs is the order.

The answer is easy, user-friendly 24/7 access to existing DMV data. This is not simply a good solution; it may be the best available because it’s simple, efficient, flexible and cost-effective.

Thomas J. Burger is president of License Monitor, the New York City, N.Y.-based driver risk management company, founded in 2001. The firm’s Web-based DriverManager software system processes and aggregates driver’s license data for both private and public sector clients in real-time and delivers it to clients’ desktops. Contact: 800-303-8063, www.licensemonitor.com.