When one of your employees is involved in a motor accident, you will already know that there may be an insurance excess to pay. What you may not be so aware of though, is just how many hidden costs there are.
When you consider the full costs and implications of an accident, it can really focus your mind on just how important it is to manage your risks effectively to help reduce the risk of having an accident in the first place.
Here are some examples of the costs you need to consider, starting with some of the more obvious ones:
- Insurance excesses – If you took out an excess – which you may have done to help reduce premiums – you will have to pay the first amount of the claim. Typically these range from £250 upwards, depending on the policy you have.
- Staff absences – If staff are unable to work immediately after the accident, you will effectively have to keep paying them for a period of time to effectively do nothing. This cost can soon mount up.
- Recruitment costs for temporary staff – If you need temporary staff to carry out the work of the injured employee, this can be expensive. Temporary staff don’t come cheap – especially if you require specific skills.
- Overtime costs for existing staff – Perhaps instead of recruiting temporary staff you need to ask your existing staff to cover their hours. This can incur overtime costs, which – depending on your pay structure – could involved paying them more than their basic rate for the additional work.
- Reduced quality of work – Whether you use temporary staff or pay overtime to existing staff, there is a risk that they will not be able to do the work to the same level of quality you have come to expect from the injured employee. That too can add to the cost as you will be losing out on efficiency.
- Off-the-road costs for the vehicle – Many motor fleet policies will include a courtesy vehicle, but what if the vehicle provided doesn’t match the specification of the company vehicle. For example if you have a van fitted with specific equipment such as shelving, the replacement vehicle may not have this, making the job more difficult to do.
- Customer relationships – If it’s harder or more expensive to do your job well, how might that impact customers? Thankfully, insurance is there to help you get back to normal quickly, so that you’re less likely to fail to meet customer expectations for a prolonged period. However, you should be aware that your goodwill with customers could be put to the test in the short-term.
- Administration time – Dealing with the paperwork and hassle of an insurance claim can tie up your people’s time. If it’s a serious accident, that can tie up the time of even more people – possibly even senior staff – which can add further to the hidden costs.
- Insurance cost increases – Last but not least, a series of accidents – or even one very serious one – can lead to premium increases in the future.
When you analyse the costs in this way, it really highlights the fact that your insurance premiums and excesses can often be just the tip of the iceberg. More importantly though, the safety and welfare of your employees is as much your responsibility when they are in a vehicle as it is when they are at your premises. Whilst out of sight, their safety shouldn’t be out of your mind.