Uninsured loss recovery claims can boost a company’s profitability

About £1 million is recovered annually by Fleet Support Group on behalf of companies whose vehicles are damaged in road crashes in which their employees are innocent victims.

On average 15% of fleet vehicle damage a year is typically classed as non-fault and FSG, through its uninsured loss recovery service, will recover insurance excess and any losses or out-of-pocket expenses.

With the average uninsured loss recovery claim amounting to almost £1,000, the cash recovered can add significantly to a company’s bottom line.

Most of FSG’s accident management clients also take the company’s uninsured loss recovery service.

Uninsured Loss Recovery Manager Steve Robinson said: “The advantage of fleets taking both accident management and uninsured loss recovery means that all vehicle repair documentation is immediately to hand.”

Uninsured loss recovery kicks in as soon as a claim is reported indicating a non-blameworthy crash. Documentation and details of the claim are gathered and a letter of claim is sent to the third party’s insurer.

On average uninsured loss recovery claims takes 70 days to settle from the day the letter of claim is dispatched to payment, including any litigation costs. However, if the case does not involve litigation the settlement period reduces to an average of 45 days.

Mr Robinson said: “Uninsured loss recovery make a huge difference to a company’s cash flow. While cash flow is vital at all times, it is even more important as a result of the credit crunch.

“If a company is spending £100,000 a year on vehicle repairs caused by road crashes and they can recover £15,000 because incidents were not their driver’s fault, then that money can be ploughed back into the business. It is in every company's interest to pursue uninsured loss recovery.”

Uninsured loss recovery success can also influence a company’s future insurance premiums.

Mr Robinson explained: “Whenever we make a recovery we advise the customer’s insurer. That will benefit their overall claims experience, which may reduce their insurance premiums. If uninsured loss recovery is not practised then a company’s claims experience will not be as good and premiums could rise in the future.”

For personal injury claims as a result of a non-fault crash, FSG has a panel of specialist insurers to help customers. Alternatively, some companies and their drivers prefer to make personal injury claims themselves.

Fleets should ban all mobile phone use following landmark court case

Safety-focused businesses should ban employees from using all mobile phones while driving after a company director is believed to have become the first person in Britain to be convicted of careless driving over the use of a hands-free mobile phone.

The landmark court case has a significant impact for all businesses, as well as public sector fleets, says the Government-backed ‘Driving for Better Business’ campaign, which is supported by Fleet Support Group.

It is a view shared by health and safety specialist lawyer Michael Appleby, of Housemans in London, who is an adviser to FSG and its RiskMaster at-work driving safety programme.

He said: “The safest approach for all businesses is to ban the use of all mobile phones while driving. Although that may be inconvenient from a business point of view it is the message that the prosecution decision is sending out.”

Although only the use of a hand-held mobile phone while driving is against the law, best-practice advice says that using a hands-free mobile phone is equally dangerous. Department for Transport research reveals that using a mobile behind the wheel makes drivers four times more likely to have a crash.

Last month (February) Lynne-Marie Howden (43), a director and head of sales at business consultancy company Insights, was found not guilty of causing death by dangerous driving after crashing into another car on the A429 in Warwickshire in November 2007. The offence carries a possible jail sentence.

However, she was convicted on the lesser charge of careless driving and was banned from driving for 12 months and fined £2,000.

Warwick Crown Court heard that the businesswoman, from Northamptonshire, had been involved in conversations on her hands-free mobile phone with her boyfriend and then a work colleague when, driving her Mercedes CLK 220 at around 40 mph in a 60 mph speed limit, she ploughed into an oncoming car on the opposte side of the road. The driver died at the scene of the crash.

Although it is legal to use a hands-free mobile phone, the prosecution claimed that the telephone calls distracted her enough to justify a charge of death by dangerous driving.

The hearing took place as road safety charity Brake, which FSG also supports, launched a new campaign aimed at urging employers to ensure their at-work drivers are not distracted when they are behind the wheel.

Called ‘Stay On Track’, the campaign aims to raise awareness of crashes caused by driver distractions and provide employers with tools to eliminate and reduce these distractions, such as use of hands-free phones, eating and drinking, or fiddling with sat nav or radio controls.

Mr Appleby said: “Irrespective of how the jury reached its decision to clear the driver of causing death by dangerous driving, the case sends out a clear warning to all businesses that prosecutors believe there is a causal link between mobile phone use and driver distraction.”

He also warned that the hearing took prosecutors a step closer to companies appearing in court charged with breaches of health and safety laws or, in the case of a fatality, corporate manslaughter (corporate homicide in Scotland).

Using a hand-held mobile phone while driving was made illegal in December 2003. Two years ago, in February 2007, the Government toughened the punishment for offenders to three penalty points and increased the fine from £30 to £60.

However, the Highway Code additionally says: “Using hands-free equipment is also likely to distract your attention from the road. It is far safer not to use any telephone while you are driving - find a safe place to stop first or use the voicemail facility and listen to messages later.”

In passing sentence in the case, Judge Richard Griffiths-Jones told Howden: “What happened to you in this case is a lesson to us all about the dangers of talking on the phone while we drive.”

The ‘Driving for Better Business’ campaign is delivered by RoadSafe on behalf of the Department for Transport and lawyer David Faithful, legal adviser to RoadSafe, said: “If a road crash occurs whether a person is using a hand-held or hands-free phone is irrelevant. The issue is whether the telephone conversation was sufficient to cause the driver to be distracted from concentrating on driving.

“I believe this is the first case where a conviction has been obtained as a result of a hands-free mobile phone conversation. The verdict sets a clear precedent and has a significant impact for the entire fleet industry and business community.”

And he warned companies: “All drivers are at risk of being prosecuted if they use any mobile phone and crash. Additionally, if the call is work-related their employer’s mobile phone policy will be examined by crash investigators. If there is no policy or it is not being managed effectively then the company could be prosecuted either because of their failure to have any mobile phone policy or failure to manage and monitor adherence to it.”

Best-practice advice says that staff should be told to switch their mobile phone off before they drive off or go to voicemail and listen to their messages later when parked in a safe place with the vehicle engine turned off.

Ease tyre safety concerns with regular checks at FSG’s Masterserve garages

Incorrectly inflated tyres are dangerous and cost money as fuel consumption can rise by up to 10% and a tyre’s life can be reduced.

Best practice suggests that tyre pressures and tyre condition should be checked at least once a month - but how many fleet decision-makers are aware that drivers undertake such checks?

That’s why Fleet Support Group encourages drivers to call in at any of its nationwide network of Masterserve garages to have vehicle tyres checked - tyres that are under-inflated by 20% of the recommended tyre pressure level can reduce the tyre’s life by up to 30%. And, while at the garage, vehicle fluid levels can also be checked and topped up if required.

Latest figures reveal that in 2007, 43 motorists were killed in crashes where illegal, defective or under-inflated tyres were a contributory factor, according to TyreSafe, a not-for-profit organisation dedicated to raising awareness of the importance of the dangers of defective and worn tyres.

In addition, if a vehicle fitted with an illegal tyre is involved in a work-related road crash then investigating police officers could knock on the company's door for answers to their questions, with a potential prosecution the result.

Typical faults detected when independent tyre checks are carried out on company vehicles are that tyres may be under- or over-inflated; tread may be below the 1.6mm legal minimum across the central three-quarters of the breadth of the tyre or around the entire circumference; tyre wear may be irregular which may indicate a wheel alignment or vehicle loading problem; or the wall of a tyre may be damaged.

The current fine for driving on illegal tyres is £2,500 per tyre and three points per tyre on a driving licence.

Poor tyre condition also lengthens stopping distances. At 70 mph the stopping distance of a car fitted with a new tyre with 8mm of tread is calculated to be almost 100 metres; with 3mm of tread remaining, a car’s stopping distance increases to 150 metres; with 1.6mm of tread remaining, a car’s stopping distance is 200 metres - double that of a vehicle fitted with a new tyre - and with just 1mm of a tread remaining, a car’s stopping distance is 250 metres.

TyreSafe Chairman Rob Beddis said: “Without regularly ensuring that tyres are correctly inflated, motorists risk compromising the way that their car behaves on the road. The first time they may become aware of this performance deficit could be when they lose control of the vehicle on an innocuous bend and are heading towards a hedgerow or into the path of an oncoming vehicle.

“Many motorists are unaware of the effect that tyre pressure can have on vehicle performance. For a car travelling at 30mph, the tyre’s contact patch has only fourteen hundredths of a second to do its job, so any influential factor such as under-inflation can produce significant changes in vehicle behaviour. When a tyre is under-inflated, the tyre contains insufficient air to support the weight of the vehicle properly, which adversely affects acceleration, braking and cornering.”

TyreSafe offers the following advice for checking tyre pressures correctly:

• Check your tyre pressure at least once a month.

• Tyre pressure should be checked against the vehicle manufacturer’s recommended level. This can be found in the vehicle handbook and on a plate which is often located inside the fuel filler flap or on the driver’s door sill.

• Check the pressure when tyres are cold (i.e. when you have travelled less than two miles).

• If you are carrying a full load of passengers or luggage, or will be towing a trailer or caravan, tyre pressures should be increased in line with the vehicle manufacturer’s recommendations. Details can be found in the handbook.

• Ensure a reliable and accurate pressure gauge is used.

• Check the pressure in all four tyres not forgetting to check the spare tyre as well.

• While checking pressures, give the rest of the tyre a visual inspection. Remove any stones and other objects embedded in the tread. Look out for any bulges, lumps or cuts.

• If you are unsure about any aspect of tyre pressure or tyre condition including tread depth take your vehicle to an approved fitting centre and speak to the experts.

For further information on tyre safety go to http://www.tyresafe.org

At-work driver ignorance revealed over licence renewal

Thousands of at-work drivers risk fines of up to £1,000 and invalidating insurance because they have failed to renew their photocard driving licences.

Additionally, a company that allows an employee to drive a vehicle without a valid licence is also liable to prosecution.

It is now more than eight months since the expiry of the first photocard licences, which must be renewed every 10 years, unlike the old green paper licences, which were valid until drivers were 70.

Photocard licences have a 10-year life because a person’s appearance can change thus making it more difficult to recognise them if a photo on a licence is older, according to the Driver and Vehicle Licensing Agency (DVLA).

Photocard driving licences were first issued in July 1998. It has now emerged that, since July last year and the end of January, 173,867 photocards expired. However, DVLA data shows that only 128,987 of those drivers have paid £17.50 and sent in new photos to renew their licences, leaving 44,880 outstanding.

As a result, more than 40,000 drivers already risk prosecution if stopped by police and may also find that their insurers refuse to pay out on claims they make.

However, that figure is expected to rise daily as more photocard driving licences expire and drivers forget to renew, despite receiving reminder letters from the DVLA.

Fleet Support Group says that licence checking should be the most obvious basic risk step for all businesses as they get to grips with ever-tougher legislation targeted at improving driver safety and removing dangerous drivers from the UK’s roads.

Companies, says FSG, could have their entire at-work-driving health and safety procedures investigated by the police if an employee is caught driving without a valid licence and particularly if they are involved in a serious road crash.

Chairman Geoffrey Bray said: “That’s why our award-winning web-enabled RiskMaster programme includes as a first step a DVLA driving licence check. Organisations that have signed up to RiskMaster have immediately removed any ongoing concerns over invalid photocard driving licences because the checks will highlight renewal dates with the system sending renewal reminders to drivers.

“RiskMaster tightens up corporate procedures for managing road safety at a stroke and none more so than in the area of licence checking, which for many organisations continues to be their Achilles' heel.”

With more than a quarter of drivers failing to renew their photocards in seven months, at that rate, more than 250,000 drivers could be risking prosecution by the end of the year.

A DVLA spokesman told The Times, which uncovered the figures, that drivers who failed to renew their licences ‘are still entitled to drive but are potentially committing the offence of failing to surrender their licence.’

The Association of British Insurers said that drivers with out-of-date photocards might not be covered for claims. A spokesman said: “It’s probably going to be a case of insurers looking at each case on its merits. If you can show you made efforts to renew your licence that would probably mean the claim is OK. But potentially there could be an issue if you claim on your own policy.”

He said that drivers would still be covered for third party claims even if their photocards had expired.

Hotel group gets on the road to a safer future with Permit to Drive scheme

Hotel operator QMH UK Ltd is in the process of issuing Permits to Drive to almost 300 at-work drivers across the company to ensure maximum occupational road risk management compliance.

The Romford-based company, which operates 18 hotels in the UK including 12 Holiday Inns, three Crowne Plazas and three Best Western hotels, is the latest organisation to sign up to Fleet Support Group's web-enabled RiskMaster programme.

The introduction of the programme, which measures individual driver compliance with QMH’s best practice occupational road risk policies, covers the organisation’s 45 company car drivers, some of whom travel up to 30,000 miles a year on business; cash-for-car opt-out drivers; staff who have elected to drive their own car on business; and occasional drivers who may use a rental vehicle.

While QMH already undertook a number of occupational risk management measures to safeguard itself, its workforce and other road users, including driving licence checks and on-the-road driver training for company car drivers, the organisation wanted to further strengthen controls.

QMH UK’s HR Director Moira Laird, who inherited management of the fleet following a company-wide reorganisation, said: “I analysed the safety-related at-work driving policies and procedures we had in place and decided that they needed to be enhanced.”

Although the company has a ‘low’ accident record with no serious incidents recorded in recent years, Ms Laird said: “Managing business driving and ensuring our employees are safe on the road is important to the company.”

QMH’s introduction of RiskMaster follows last year’s implementation of the Corporate Manslaughter and Corporate Homicide Act and the more recent introduction of the Health and Safety (Offences) Act, which brings with it harsher punishments for managers who fail in their health and safety responsibilities.

Ms Laird said: “The new legislation prompted QMH to act and ensure it heightens the importance of safe driving for employees, provides measures that are as robust as possible in the event of investigation following a road traffic accident and uses the data to provide bespoke training for individual staff whom the system identifies as being at risk.”

While it is too early to quantify potential savings from the introduction of RiskMaster, QMH expects to see future reductions in insurance-related costs and vehicle maintenance charges.

RiskMaster has been introduced after Ms Laird attended an FSG seminar. FSG has now held a series of workshops to introduce QMH employees to RiskMaster and she said: “The workshops were excellent because they raised awareness with drivers of the risks they faced on journeys. As a result of the workshops the staff appreciate why the company is introducing RiskMaster.”

QMH drivers are granted a Permit to Drive following a DVLA licence check. An online driving ‘test’ is then used to profile drivers as ‘low’, ‘medium’ or ‘high’ risk with the assessment used as the basis for future on-the-road driver training. Vehicle maintenance records, insurance details, MoT and VED records, and any data on crashes and motoring offences are also fed into the system.

As information is supplied, it is analysed by the RiskMaster system that point scores a driver’s data. If points rise above a preset level, management is alerted. So a driver can qualify for a permit, or a temporary permit, or be denied until the necessary corrective action is undertaken.

The system creates an individual and comprehensive Driver Operating Life Report from which data is used to continually assess individual drivers in their driving-at-work activity.

That analysis is a continual process so each driver has a Driver Operating Life Report and each driver is simultaneously measured against QMH’s own specific parameters that have been fed into the system.

Fleets have just a month to lodge claims for VAT refunds worth millions

The clocking is swiftly ticking down on the opportunity for fleets to obtain VAT refund windfalls collectively totalling millions of pounds.

Companies have only until March 31 to lodge claims with HM Revenue & Customs for VAT refunds dating back to 1973 in two separate areas.

HMRC will consider VAT refunds on:

• Fleet support bonus payments paid to companies that outright purchased vehicles between 1973 and 1996/7. These were back-end volume-related bonuses typically paid by vehicle manufacturers and/or dealers to large fleets on which VAT would have been paid at the time.

• Mileage reimbursement payments made by companies to employees.

Flagship first highlighted the VAT refund opportunity last year and, with Britain in the depth of recession and many companies starved of cash, Fleet Support Group Chairman Geoffrey Bray says no business should ignore the cash opportunity.

He said: “With cashflow stretched, and payouts potentially amounting to thousands of pounds, the VAT refund could amount to a major financial lifeline for many organisations.”

The VAT refund opportunity was announced by the Government in the small print of the March 2008 Budget. The 12-month window to lodge a claim follows a series of court cases and legal challenges over many years that reached both the House of Lords and the European Court of Justice concerning VAT overpayments by companies in a variety of areas - including vehicles.

International tax expert firm KPMG is an adviser to FSG, particularly in relation to its ‘Fleet Cost Reduction Steering Group’ and the web-based interactive forum launched to enable customers to exchange money-saving ideas, which can be accessed at www.fsguk.com

With VAT claims possible for a 23-year period, Simon Bush, Senior Manager, Indirect Tax, told an FSG seminar last year: “The amount of money that is potentially at stake is colossal and in the current economic climate would provide a welcome boost to all businesses.”

The fleet support-related VAT claims stem from the fact that in 1997 HMRC accepted that retrospective volume-related bonus payments were not VATable having originally said they were.

Meanwhile, companies have always been able to reclaim VAT on the fuel element of mileage allowance payments. However, KPMG believes that many companies have overlooked the allowance.