Fleet safety claims are on the rise and woodworking businesses are at risk of major losses and driver safety issues today. As a leading insurer in the woodworking space, we have seen firsthand how frequent and severe driving related incidents can be to a business and employee safety.

Data from Samba Safety’s latest auto trends report shows the volume of claims and the amount of resulting damage have both spiked in the past few years. Auto insurance claims have risen 14% since 2020, with severity rising 36% within the same time span.

A rise in claims in tandem with nuclear verdicts, or legal outcomes where juries award upward of $10 million, have led to a difficult set of circumstances for fleet managers and insurance companies. When a woodworking business owner suffers a fleet-related loss, the amount awarded often surpasses the business owner’s insurance coverage limits, leaving insurance companies unable to meet the full award amount. This gap is creating additional challenges for business owners, who must reach into their own pockets to get their vehicles up and running again after a significant accident.

While this new environment could lead to costly consequences for business owners at woodworking businesses, there are steps they can take to minimize their fleet-related risk exposures and improve fleet safety. This starts with understanding the types of claims that are most frequently striking the woodworking industry.

Typical claims

Learning about the types of fleet-related risks a woodworking business owner may face can help curb safety concerns.

First and foremost, distracted driving is still a leading threat. According to the National Highway Traffic Safety Administration (NHTSA), 3,308 people lost their lives to distracted driving in 2022. These issues have been exacerbated recently by the industry’s driver hiring troubles, as more inexperienced drivers are taking the wheel of commercial vehicles, unfocused, untrained and causing damaging accidents.

Beyond distracted driving, the top five claims we are seeing in terms of frequency are:

1. Incidents where the car was struck by an object or animal
2. Drivers striking a parked car 
3. Drivers rear-ending another vehicle 
4. Drivers failing to observe clearance  
5. Drivers backing into another vehicle

In terms of the most expensive claims we have been seeing, these would include: 

1. Changing lane incidents
2. Losing control of a vehicle off road 
3. Rearending other vehicles
4. Falling to yield  
5. Vehicle theft

While it may not be possible to eliminate the risk of incurring these types of claims entirely, business owners at woodworking shops can take significant steps to build a culture of safety that fosters a risk-averse driving environment. Better safety practices and a refreshed approach to driver hiring are important ways to start.

Building a culture of safety

Quality fleet safety requires a mixture of good hiring and the right protective measures and technology. Here are some recommendations we often share with our insureds in the woodworking space:

• Employ Experienced Drivers: Insurance companies value years of driving experience when determining truck insurance premiums. We recommend hiring drivers with at least two years of commercial driver’s license (CDL)  experience. A roster of more experienced truck drivers implies that your drivers can better navigate inclement weather and other less-than-ideal driving conditions.
• Consider Driver Age: Data from the internal TransUnion for Ohio shows that among new CDLs in their state, younger drivers have significantly higher moving violations and accident rates. Younger truck drivers are more likely to be involved in an accident and as a result are a higher risk for woodworking businesses. 
• Review Driver Records: Motor Vehicle Record (MVR) Monitoring provides fleet managers with access to ongoing insights and alerts detailing a driver’s history, license status and performance. Managers can see any violations, accidents or convictions promptly and react accordingly. Woodworking businesses should prioritize hiring drivers with clean driving records and a strong employment history, and in the event of any incident, they should review safety best practices with the driver in question.
• Implement Telematics: Telematics has become an incredibly powerful tool for woodworking businesses today. Telematic solutions provide business owners and fleet managers with tools from cameras to GPS tracking, accelerometers and direct feeds that track driver safety data including speed, harsh braking and distracted driving. At businesses that have implemented telematics, loss ratios have declined from 210% to 68% on average.

Going deeper

In addition to the recommendations above, there is more business owners and fleet managers can do to protect their drivers, those around them and their business. Consider:

• Investing in New Technology. Advanced driver assistance systems (ADAS) are powerful and can greatly improve the driver's experience. These innovations can include automatic emergency braking (AEB) and forward collision warning (FC), which provide drivers with emergency response tools in case of a near incident. ADAS systems also offer real-time alerts and warnings if dangerous driver habits are detected, such as unsafe lane departures or drowsy driving.
• Building a Recruitment Strategy. Get creative with the approach to finding new talent for the future of your business. Some potential tactics include:
  o    Work with community colleges and driver schools to find apprentices: Some community colleges offer driver training programs. Get involved in recruiting events at these schools. Some students may be too young to drive across state lines on a commercial license, but even those students you can recruit and train as apprentices. Take a few years to educate these potential drivers and ensure they understand proper driver safety before offering them the full driver workload. This will help ensure you are hiring drivers that are dedicated to safety.
  o    Develop a referral program: Offer incentives to current drivers and employees to refer good drivers in their personal or professional network.
  o    Look within your business: Consider training other employees that show aptitude and a desire for skill-development to become company drivers.
• Getting Serious about Driver Training.  Driver training is critical. Driver training should begin at-hire with behind-the-wheel lessons where potentially problematic driver behaviors can be identified and corrected. Fleet managers should then conduct behind-the-wheel observation and training every 18 months to two years.
• Routine follow-up drive training that provides drivers with the right tools and training to keep them from resorting to old, unsafe habits behind the wheel is important as well. This can help lower the number of employee-involved crashes annually and reduce risk.

Protecting the future of your business

As woodworking businesses continue to navigate rising costs and challenges with fleet management, investing in new technology and safety measures can make a significant difference. Working with an insurer who knows the woodworking industry and specializes in supporting these businesses can also help identify any potential risks before they turn into a major problem. Business owners and fleet managers can start improving safety by building out comprehensive safety programs, implementing the right technology and refreshing the hiring process.

About the author: Brad Schoolcraft is a senior loss control representative at Pennsylvania Lumbermens Mutual Insurance Company (PLM). PLM is a nationally recognized property and casualty insurance carrier serving the lumber, woodworking and building materials industries. Brad can be reached at [email protected].