Risk Management and Insurance: Vehicle Risks

Edward A. Schirick, CPCU, CIC, CRM
September 2017
wet roads

Camp vehicle risks are among the scariest for camp owners, directors/risk managers, and insurance company underwriters because the risks to which camp vehicles are exposed are not entirely within your control. In addition, each camp is different. Some have a minimal transportation risk but others, especially day camps and resident camps with trip programs, have significant transportation risk.

Many camps own a business vehicle, have employees using their own vehicle on camp business, or hire vehicles with or without a driver. Risk develops out of the ownership, maintenance, and use of these owned, non-owned, and hired autos. These risks are present to varying degrees in all types of camps.

Your camp's plan for managing vehicle risks needs regular attention and refinement. American Camp Association Transportation Standards TR, 1 through 15 provide a good foundation for your camp's auto risk management plan. Stick with the fundamentals beginning with the risk identification process. This involves anticipating the circum - stances, situations, and problems that might develop and cause bodily injury or property damage and financial loss to your camp.

Here is a partial list of auto risks followed by some discussion of each:

  • Inexperienced drivers
  • Poor driving records
  • Unfamiliar vehicles
  • Unfamiliar roads
  • Other drivers' unsafe driving actions
  • Vehicles with deferred maintenance
  • Speeding
  • Poor road conditions
  • Driver distraction and fatigue
  • Overloading of vehicles
  • Carrying passengers in nonpassenger vehicles

Inexperienced Drivers

Auto insurance underwriters require that drivers be at least 21 years old to transport campers because accident statistics demonstrate younger drivers are more accident prone. Regardless of their age, international staff also present an inexperienced driver risk when they're from a country whose driving rules differ from ours, such as those countries that dictate driving on the left side of the road. Their emergency reaction may cause them to do the opposite of what is needed because they're used to driving on the opposite side of the road.

Poor Driving Records — TR. 14

Speeding tickets and other moving violations are a red flag for underwriters and should be for you as well. These violations indicate driving behaviors that may lead to accidents. You may also increase your liability if you hire a driver with a poor driving record and the driver has a subsequent accident.

Some insurance companies have discontinued the service of checking for motor vehicle records. Under these circumstances, the risk of checking for driving records falls to the camp. Consider getting driving records as a normal part of the background check for every employee or, at a minimum, for those prospective employees who will have driving duties.

Some underwriters may be unwilling to allow international staff to drive unless they can bring proof of their good driving records from their native country.

Unfamiliar Vehicles — TR. 15

Most 21-year-old drivers don't drive a van at home. Allow some time for them to become familiar with the size of the vehicle and its handling characteristics. One of the more frequent camp auto accidents involves a van turning left across traffic at a stop light because the driver of the van miscalculated how long it would take for his vehicle to clear the intersection. Other accidents attesting to driver's unfamiliarity with the vehicle size involve underestimating the height and width of the vehicle. Other unfamiliar vehicles may include golf carts, pickup trucks, stake body trucks, and other camp utility vehicles.

Unfamiliar Roads — TR. 15

Unfamiliar roads and their traffic patterns are a major concern because risk factors on the roads can change depending upon the time of day. It is essential to provide driver training for all camp drivers. All drivers should be given the opportunity to familiarize themselves with the roads they'll be driving during the summer under simulated conditions, if possible. Consider specialized van driver or bus driver training offered by independent contractors to ensure a comprehensive approach.

Other Drivers' Unsafe Driving Actions

Camps thrive on a controlled risk envi - ronment. Once the camp vehicle leaves camp, control is lost. Defensive driving instruction can give camp employees the tools needed to cope with other drivers but doesn't eliminate this risk. Other drivers' road rage, aggressive driving, failure to signal lane changes, and distracted driving are risk factors camp drivers will be expected to manage. Consider including defensive strategies to combat these risks as part of your driver training if they're not included already.

Vehicle Deferred Maintenance — TR. 12 and TR. 13

TR. 12 requires a mechanical evaluation of every vehicle prior to use at camp. Following the manufacturer's recom - mended maintenance schedule helps to reduce liability if an accident is caused by a mechanical malfunction. TR. 13 requires a policy of regular vehicle safety checks. Many camps do this daily using a checklist for the driver to complete by inspecting the vehicle before it is used each day and when it is returned at the end of the day. This process is intended to reveal conditions that develop during daily operations. Pay special attention to tire damage, rims, and tire pressure. A caveat if you're going to implement such a daily inspection: Be prepared to take a vehicle out of operation for repair as needed. Deferring maintenance is unwise and may increase liability in an accident.

Speeding

Speeding is a major contributor to accidents and fatalities. Despite this knowledge, speeding is a common occur - rence on the road today. Hopefully your camp drivers have clear instructions about speeding and will have the discipline to resist the temptation to speed with campers on board.

Drivers should slow down when the driving conditions deteriorate in rain, fog, or windy conditions.

Poor Road Conditions

Rural roads are constructed differently than their urban and suburban cousins. The shoulders may be soft; they may be crowned for water drainage; they twist and turn; and they may be in poor repair. Likewise, highways may be in disrepair or under construction, and changing traffic patterns add to road risk. Additional factors include early morning and late afternoon sun that can be blinding to the driver.

Are your drivers educated to manage these risks?

Driver Distraction and Fatigue

Talking on the phone or texting while driving is classic distraction and is against the law in many states. Drivers, however, continue to ignore these laws. Your camp drivers may be instructed not to talk on their phones or text while they're driving, but they'll be contending with other drivers who engage in this behavior. Campers can themselves be a distraction for van drivers, which may be mitigated by always having another adult in the vehicle to manage camper behavior as prescribed by TR. 6. The best advice for all camp drivers is just drive.

Driver fatigue is an issue especially after a long day outside in the sun. Staff may be tired because of poor sleep the night before. Fatigue is a factor as the summer passes. It is important to have backup drivers in place on long trip pro - grams to reduce this risk. Be sure to add a discussion of these topics during driver training if you don't discuss it already.

Overloaded Vehicles

Carrying too many people in a private passenger vehicle or SUV should be prohibited. Everyone should have a seat and seat belt. Seat belts should be used by everyone including passengers in the rear seats, whether they are campers or staff. Serious accidents have resulted from vans being overloaded. Use of roof racks and trailers to carry equipment can contribute to rollover and instability. Some insurance companies prohibit the use of roof racks and trailers on vans to reduce this risk. Safety equipment available on newer van models, such as vehicle stability control, optional 12-passenger configurations, wider wheelbases to im - prove weight distribution, and other safety features have greatly improved the risk inherent in loaded vans. Be sure to buy or lease vans with the latest safety equipment and refrain from overloading them.

Carrying Passengers in Nonpassenger Vehicles

Standard TR. 2 prohibits transportation of campers and employees in nonpassenger vehicles. This includes pickup trucks, cargo vans, and flatbed stake body trucks. Unfortunately, there is a history of serious injury resulting from transporting camp - ers and staff in the backs of pickup trucks and other nonpassenger vehicles. This extends to carrying people in the back of golf carts and other utility vehicles unless they are configured with seats.

Insurance

Auto risks are typically transferred to an insurance company. State laws mandate minimum limits for auto insurance, but the very nature of camper transportation and risk renders these limits inadequate. The risk of catastrophic loss is great requiring limits in the millions of dollars. What limit of liability to carry is usually a topic for discussion with your insurance agent, but depends upon the unique aspects of your camp operation and extent of exposure.

Following this thinking, day camps that transport their campers have greater exposure to risk than a day camp that uses an independent contractor to provide transportation. Day camps that transport their campers in buses have a greater catastrophe exposure than day camps using vans. Similarly, resident camps with trip programs have a greater exposure and may need higher limits of liability than resident camps without these trips.

Camp auto insurance must be customized to address the variety of risks present in your camp's operations. For example, seasonally leased vans require primary auto liability and physical damage insurance. This coverage can be provided in a couple of ways. One approach may be more cost-effective than the other depending upon the underwriter. Work with an insurance agent who knows the ropes.

This discussion was intended to increase your awareness of some issues in camp transportation risk management. To get the most out of this information, plan to spend some time before next summer reviewing your vehicle risk management plans. Add to your list of auto risks to be managed. Talk with your insurance agent about the scope of your auto insurance coverage to ensure you have the broadest protection available from your insurer. Remember, risk management is a never-ending process because risk is constantly changing.


Edward A. Schirick, CPCU, CIC, CRM, is a consultant affiliated with RPS Bollinger Insurance located in Little Silver, New Jersey. He is a chartered property casualty underwriter, a certified insurance counselor, and certified risk manager. He can be reached at 914-213-8985, or contacted by e-mail at eschirick@hotmail.com.