Seven Steps to Improve Fleet Safety and Reduce Insurance Premiums for Oil & Gas Contractors

By Steven Langlinais from

If you want to cut your liability insurance premiums, look in your parking lot. Many oil and gas contractors routinely have more claims related to vehicles than from well operations. According to the National Institute for Occupational Safety and Health, 40% of on-the-job deaths in the oil and gas industry were from highway crashes, and other car and truck accidents. This is especially true for smaller contractors: Workers in companies with fewer than 20 employees are four times more likely to die in a vehicle crash than those at firms with more than 100 employees.

But whatever the size of the company, Crystal & Company’s experience suggests that most energy-service companies can save money and improve safety by taking measures to reduce vehicular accidents. Here are seven steps that every company can take to reduce accidents and cut their insurance premiums:

1. Only hire safe drivers. Before handing the keys to new drivers, be sure they can drive safely. Start with their state motor vehicle records, which you can often order through your insurer. Don’t hire anyone with a pattern of accidents and violations and don’t take an applicant’s word about their capabilities. Test their ability to operate equipment.

2. Be vigilant about vehicle maintenance. When multiple people drive the same car or truck, it’s easy for little problems to get ignored until they become out of hand. Make sure there is a schedule for all routine maintenance needed for every vehicle—and designate a person who’ll see to it the schedule is followed.

3. Pick the right vehicle for the job. Many accidents happen when a vehicle is used for a task it wasn’t meant for, e.g., a truck that’s too big to make deliveries in a crowded urban area or too small for the load it’s carrying. These are expensive risks to take.

4. Be serious about banning electronics while driving. According to the National Safety Council, motor vehicle deaths have increased by 14% over the past two years, and a major cause is drivers distracted by cellphones and other devices. That’s why an increasing number of large companies have banned employees from using phones while driving. These are tough rules to enforce. But it’s worth it, for safety and cost reasons. One company I know required all employees to lock their phones in the glove compartment before driving, firing anyone on the first violation. Accidents fell by 90%.

5. Look for patterns in loss and claims data. Call your insurance company or broker annually to review all claims. You’d be surprised how often you discover, say, a run of accidents involving a certain location, driver or vehicle model. Fix the underlying problem, and your accident rate and premiums will fall.

6. Consider in-vehicle monitoring systems. Devices that monitor vehicle location and driver actions have become relatively inexpensive and have improved safety and reduced the cost of insurance and vehicle operation. They also help provide facts for an honest conversation about whether unrealistic management expectations are pressuring workers to drive at unsafe speeds.

7. Build a system and follow it. It could be as simple as a series of checklists for key tasks, like hiring a driver, weekly review of fleet maintenance, and daily checks before operating a vehicle. Even surgeons and pilots make fewer mistakes when they follow to-do lists. Government agencies, insurance companies and others offer advice on vehicle safety systems and private vendors sell premade fleet safety programs, either on paper or online. But you must communicate your commitment to any system you set up. That means clear consequences for violators—and a management team that models ideal behavior by conspicuously following all the rules.

Steven Langlinais is a director in Crystal & Company’s Houston office, offering safety and accident reduction consulting to oil and gas clients.

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