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MVRs – An Indicator of Future Auto Claims

By March 19, 2012August 22nd, 2018

Across a wide and varied list of industries, a large liability claim arising from the operation of a vehicle is one of the most severe threats to a company. When we help clients select the most appropriate limits of insurance there are many discussions about products and professional liability precedences, but the most realistic scenario for a claim over $1,000,000 is from a commercial auto liability loss and resulting 3rd party suit.

Even very small companies with 2-3 employees and no “owned” vehicles have created claims in the $1 million to $7 million range. When we discuss Umbrella claims – an Umbrella being the excess liability policy that provides an additional layer of insurance – with major insurance companies, usually 2 of their 3 largest claims each year are from an underlying auto liability claim.

There is a relatively low cost tool you can use to help reduce the likelihood of a claim in the future. Motor vehicle records (or “MVRs”) are a report for each individual holder of a driver’s license that summarizes that driver’s history of violations, accidents, tickets, etc. The evidence is that drivers that show a pattern of driving behavior that results in tickets and other incidences are more likely to create a severe accident with bodily injury to third parties.

Thankfully, it’s easy for your insurance agent to get MVRs once a year for each employee. By reviewing each of them and being prepared to take action accordingly, every employer can help reduce the possibility of a claim from the most likely source of large losses (auto liability).

It is best to have a written plan of action that is followed based on the results of an employee’s MVR so your response to issues is consistent. We can help you on a consultative basis to develop your own set of guidelines based on the number and type of violations for a driver. Actions can include a restriction on the employee’s driving activity on company business, change of job duties, and dismissal from employment.

Ignoring employees with extremely negative MVRs, such as those driving on a suspended license, will not serve as a defense and only increases your liability – call us today to discuss a plan for monitoring and reducing your liability exposures arising from the operation or use of vehicles on company business.