6. Risk management

How can you minimise your risks and reduce costs?

Minimising fleet risk can have a significant impact on costs.

Such risks might include:

  • Disposal risk
  • Accidents
  • End of contract damage
  • Downtime

Disposal risk relates to the actual value achieved on vehicle disposal - this risk can be significant for your business if you outright purchase your vehicle fleet - effectively you will be basing your budgets and forecasts on your predicted resale values, which may or may not be realised, and which could leave you exposed to unforeseen cost. The alternative is to outsource the risk by leasing your fleet through one or more of the leasing products described earlier.

To minimising the cost of accidents, end of contract damage and downtime, you will need to focus on identifying and managing the occupational road risk which your organisation and drivers face. Undertaking a comprehensive risk assessment to identify where the greatest risks lie in terms of individual drivers, vehicles, and journeys undertaken is not only good practice, and will ultimately lead to cost saving, (if action is taken to mitigate such risks e.g. through selective driver training), but is also a key focus of recent duty of care legislation:

  • Under the Management of Health and Safety at Work Regulations 1999, every employer is required to carry out and record a risk assessment with regard to the Health and Safety of their employees and examine how risks can be reduced. This applies to those driving on company business whether in a company car or not. Employers should consider the risks to employees on the road in the same manner as those in a workplace.


  • The Corporate Manslaughter and Homicide Act gained Royal Assent in July 2007 and became law in April 2008. The Act outlines companies' duty of care responsibilities to all employees (whether company car or private car users) when driving on company business; particularly as private cars being used for business purposes, including cash takers, have been acknowledged as high risk.


  • The Health and Safety Offences Act 2008 updates the Health and Safety at Work Act 1974 and increases the penalties for breaches of duty of care towards employees, raising the maximum fine to £25,000 and broadening the range of offences for which individuals can be jailed.

Effective and detailed risk assessments demonstrate that your organisation takes employee safety seriously and cost savings may be achieved by improving driver awareness and lowering insurance costs by demonstrating a safer fleet.