September 2011

How to Develop and Employ an Effective Motorcoach Risk Management Program

by Robert Crescenzo

Like most organizations, motorcoach companies are personnel driven. It's very important that a plan be in place for any and all scenarios, which allows key people to perform their duties.

Like most organizations, motorcoach companies are personnel driven. It's very important that a plan be in place for any and all scenarios, which allows key people to perform their duties.
Every motorcoach company is vulnerable to a wide variety of exposures which could negatively impact its profitability, and in some cases, its very survival. Therefore, it's imperative that these risks be identified, analyzed and evaluated to understand the relative threats each represents. And, once they are understood, key decisions must be made to manage them.

All of the above is the foundation of a motorcoach company's risk management program. Because a true risk management program involves a thorough risk assessment, that process must determine, among other things the motorcoach company assets that need to be protected; the threats to and vulnerabilities of those assets; the implications if those assets are destroyed or damaged; the value of those assets to the motorcoach company; and, most importantly, the actions that need to be taken to minimize loss or damage to those assets.

Because the concept of risk avoidance, wherein the company abandons the risk-producing activity, is impractical to a passenger transportation company, the tenets of loss prevention must be applied. A solid loss prevention program will either reduce the likelihood of a motorcoach accident or reduce the frequency of such events. Motorcoach accidents and resultant injuries are not bad luck; they have causes which can be identified and remedied. Similarly, the risk management concept of loss reduction can ­reduce the severity and consequential impact of an accident while acknowledging that accidents are an unfortunate part of motorcoach operations. It must be noted, however, that there are two distinct categories of loss: severe accidents and frequent accidents. The two are quite different in a risk management context. Frequent accidents can be acted upon through loss prevention and safety programs; severe accidents are largely random and unpredictable.

Not unlike most organizations, motorcoach companies are personnel driven, and it's very important that a plan be in place for any and all scenarios, which allows key people to perform their duties. Part of that plan calls for having trained replacement personnel available for immediate deployment in a crisis situation. Along those same lines, motorcoach company management must avoid "putting all eggs in one basket" by physically separating company resources so a single disaster or crisis at "headquarters" will not disable the whole company. It might be helpful to maintain multiple copies or "spares" of critical components of the operation in separate locations. Similarly, consideration should be given to transferring legal, financial and operational responsibility for key activities to another organization or vendor.

Unique risks
In short, management needs to identify its risks and do something about them. For motorcoach companies, the categories of risk can be broken down into the time-tested reporter's credo of five Ws and an H:

  • Where you go - Destination.
  • What you drive - Type of ­vehicle.
  • Who you drive - Know your ­passengers.
  • Who the driver is - Does the driver match the trip, vehicle, passengers?
  • When you go - Time of day/night.
  • How often you go - Experience with the roads, destination, parking, drop off, pick up and knowledge from other drivers.

Thus, the key to successful risk management for a motorcoach operation is to develop a trip Risk Analysis Rating System, involving reservations, operations, dispatch, maintenance, safety and management staff.  Before a reservation is accepted, there should be a sense of the type of risk this trip presents. A familiar trip done at a different time of day by a newly hired driver may require added time, attention and communication to manage the risk.

It's imperative to identify who controls assignments, routes, vehicle assignment and driver support. Serious consideration should also be given to identifying trip specific risk factors and implement focused driver training to address those unique issues. For example, a summer trip to Washington, D.C., presents an increased presence of tourist pedestrian traffic. What's more, these pedestrians might not be attentive to traffic hazards. The proper risk tactic to employ might be additional driver training on pedestrian conflicts. For example, routes can be changed or moved to less heavily trafficked times of day to reduce the risk exposure.

A good starting point for a thorough Risk Analysis is reviewing your accident or claims register. The first and somewhat surprising discovery will be that the most common type of motorcoach accident is the rear-ender. Rear-end accidents tend to be more costly. Perhaps even more surprising is the fact that the vast majority of the time it's the motorcoach being driven by a commercial driver licensed operator that's hitting a private passenger vehicle in the rear.

So, too, the striking of parked or non-moving vehicles and intersection accidents, other high frequency claim types, are more often than not caused by the motorcoach's action of the professional driver.
To better control and manage these types of "at fault" claims, management must conduct a complete risk analysis, including monthly reviews of drivers with multiple claims or incidents and research to determine why some drivers have markedly more "minor" claims or incidents than their peers.


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