Accident Losses

The Cost of Recovering from Accident Losses

FMCSA/Department of Transportation

You already know that driver accidents cost your company in many ways, but do you know exactly how much money you are losing each year because of them? Consider this: the extra revenue motor carriers must generate to cover for accident losses gets exponentially higher the greater your costs and the lower your profit margin. That means your company would need to generate an additional $1,250,000 in revenue to pay the cost of a $25,000 accident, assuming a 2 percent profit margin.

t is also important to note that accident costs can be either direct or indirect. When a driver gets into an accident, you will lose more than just one load. Place great emphasis on driver training and implement a thorough risk management program to mitigate your costs. Some examples of accident costs include:

Direct Costs:

  • Cargo damage
  • Vehicle damage
  • Injury costs
  • Medical costs
  • Loss of revenue
  • Administrative costs
  • Police report
  • Possible effect on insurance costs
  • Increased workers’ compensation premiums
  • Towing costs
  • Storage of damaged vehicle

Indirect and Hidden Costs:

  • Lost clients, prospects and sales
  • Missed meetings or missed drop-offs/pickups
  • Lost work time
  • Cost to hire/train replacement employees
  • Loss of personal property
  • Replacement vehicle rental
  • Damaged equipment downtime
  • Accelerated depreciation of equipment
  • Poor public image
  • FMCSA/DOT fines and penalties
  • Increased public relations costs

Source: the U.S. Federal Motor Carrier Safety Administration (www.fmcsa.dot.gov)

2017-09-28T20:00:39+00:00
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