INTRODUCTION

S.H. Smith & Company, Inc. entered the Public Transportation marketplace in 2005. Our entrance filled a long existing void for an insurance program produced and underwritten by a firm with a solid foundation and unparalleled client service. We currently serve as the Program Administrator for the National Public Transportation Program representing Zurich in North America. As such, we underwrite automobile liability, general liability, and excess liability. This includes Charter Bus, Intra-City Buses, Tour Buses, and Sight Seeing Operators to name a few.

THE PROBLEM: DISTRACTED DRIVING

For almost as long as we have possessed the technology of the automobile, we have been afflicted with distraction in one form or another. Perhaps the oldest contributors to distracted driving are food and drink; two distractions that we have been unable to mitigate in the century since the automobile came into popularity in this country. Our inability to effectively reduce driving distractions over the last century is not encouraging to think about when one considers the increased number of potential distractions facing today’s drivers. With so many of these potential distractions coming from technological advancements and an ever-increasing desire for greater efficiency that seems intrinsic to 21st century Americans, it is easy to see why so many drivers today are guilty of driving distracted often as a result of multi-tasking.

Driver inattention is a leading cause of traffic crashes, accounting for nearly 80% of all collisions.1 While most people are aware of the more overt forms of driving distractions such as eating, drinking, or adjusting the radio, some drivers do not realize that something as innocuous as daydreaming or simply thinking momentarily about something else can be just as dangerous as some of the more blatant distractions. Nevertheless, technology has upped the ante on distracted driving with the plethora of devices that work their way into the vast majority of vehicles currently traveling on US roadways. In 2001, a study on distracted driving was conducted at the University of North Carolina. This study found cell phones ranked eighth among other driver distractions that were found to cause accidents.2  Within six years, empirical data showed that the most prominent source of driver inattentiveness facing our roadways was cellular phone use.3 As of 2010, about 18% of the United States has instituted legal ramifications for drivers found talking on a hand-held cellular device while operating a vehicle. Furthermore, the DOT has implemented federal regulations to prohibit commercial truck and bus drivers from using any cellular phone or device that takes a driver’s attention off the road. While these state specific and federal restrictions are certainly a step in the right direction towards limiting driving distractions, there is concern rising among some who question the effectiveness of hands-free devices when it comes to curbing distraction for the driver.

Most studies on driving distractions focus on three major forms of distractions: physical, visual and cognitive. The difference between using a cellular phone and other driving distractions is that talking on a cell phone places cognitive demands on the user. Though activities such as eating and drinking while driving are physically and sometimes visually distracting to the driver, the interactive element—introduced when conversing—is absent. It requires a higher level of concentration to listen, process and respond as opposed to just listening. But what about driving with passengers—would that not pose a similar threat due to the likelihood of conversation? The answer is yes, but at least a passenger is physically present and capable of visually observing the same environment as the driver. During a cell phone conversation, it is impossible for the person on the other line to be able to alert the driver of a sudden halt in traffic, for instance. It is this reasoning that has led some to study the actual effectiveness of using “hands-free” devices while operating a vehicle.

A study conducted by the University of Utah, which used driving simulators to gather empirical data, found that there is “no difference” in the cognitive distraction [placed on the driver] between hand-held and hands-free devices. Text messaging, which has become an increasingly popular means of mobile communication, takes driving distraction to an even higher, more dangerous level by affecting all three—physical, visual, cognitive—major forms of driving distraction simultaneously. Whether cognitive or otherwise, many of the potential distractions facing drivers today are even more prevalent among commercial motor vehicle operators who are often required to use hand-held devices to communicate with other drivers and are more likely to operate vehicles while suffering from drowsiness as a result of their occupational schedule. 

PROOF OF THE PROBLEM

Driving distractions have always been present, but the increasing popularity of cellular phone use is forcing the matter to be addressed. Once a luxury only afforded to few, cellular telephone access has increased exponentially during the last 20 years. According to the International Association for Wireless Telecommunications Industry (CTIA), the United States had 292.8 million cellular subscribers as of June 2010.4 This number of cellular subscribers is equivalent to 93% of the population of the United States.

The popularity of cell phones has increased many state governments’ strides towards banning cell phone use while driving. However, a report by the Highway Loss Data Institute recently found that accidents actually increased in three of the four states they polled in which driver texting was recently banned.5

Distracted driving factors, such as cell phones, do not affect personal and recreational drivers alone. Commercial and public transportation vehicles are also at risk and make up a large part of this country’s accident statistics. In 2007, 413,000 large trucks were involved in traffic crashes in the U.S. and 4,584 were involved in crashes that were fatal, killing a total of 4,808 people.6 Of those killed in crashes involving commercial motor vehicles, 75% were occupants of other vehicles.


LEGAL IMPLICATIONS

While a company may not be directly liable for its employees’ actions, employers may be held vicariously liable for dangerous behavior and negligent actions of their employees while conducting company business. The advent of Employers’ Vicarious Liability exposure can be traced back almost thirty years when a prominent Pizza delivery company began instituting a delivery guarantee of 30 minute or less. The company in question was found vicariously liable for their employee’s alleged negligent and dangerous driving behavior by encouraging the 30-minute delivery guarantee.

Today, Employers’ Vicarious Liability litigation is more often aimed at employers who fail to prohibit their employees from using distracting devices for business purposes—such as cellular telephones—while driving. In more recent cases where Employers’ Vicarious Liability was proven, companies were found negligent for either tacitly endorsing cellular phone use while driving or not implementing cell-phone safety policies. In either event, juries have reacted unfavorably to employers whose employee drivers were found guilty of causing an accident while using a cellular device. This exposure continues to be prevalent among commercial motor vehicle operators because often times they are required to use hand-held devices in order to communicate with their dispatch services.


SOLUTION

While an over-arcing policy to prohibit all forms of potentially distracting behavior while driving seems unlikely at this point in time, there are measures that employers and drivers can take to help mitigate the dangerous conditions created by distracted driving. The first and most viable measure that we as a society should explore in greater detail, in an attempt to curb distracted driving, is educating our new drivers on the dangers of driving while distracted. Instituting a mandatory driver’s education program for all aspiring drivers license holders would be a great start. It is necessary to uniformly educate tomorrow’s drivers on the dangers associated with driving while distracted. Although driver education and defensive driving courses exist, the vast majority of new drivers in this country receive no professional driving instruction prior to earning a license to legally drive on this country’s public roadways. This needs to change. This is not to suggest that all aspiring drivers must attend a performance driving school, but a mandatory educational course for new drivers should be implemented. Many new drivers fail to understand that driving is an activity that requires the undivided attention of the operator; anything less is unacceptable. As simple of a concept as this may seem, it is one that needs to be understood by those wishing to use our public roadways. Because distracted driving has become such a widespread pandemic in this country, attacking the problem at the root of the matter is the greatest way to affect change. We need to educate tomorrow’s drivers on the dangers of operating a vehicle while distracted, while breaking the distracting habits and behavior of our current drivers.

Another way to help minimize driving distractions is to institute more severe legal ramifications. While it may have been difficult in the past to determine whether or not driving distractions such as cellular phone us were the cause of an accident, today’s technological advancements make such determinations possible. If they can use cellular phone records as evidence in litigation, we should be able to ascertain whether or not a cellular device was being used at the time of an accident. Stricter legal ramification for drivers caught using communication devices while driving need to be implemented, such as those reserved for driving under the influence of alcohol. Even in those states that do prohibit the use of hand-held devices while driving, the penalty is usually a fine which some states even waive as long as the offender is able to produce evidence of a hands-free device by the appointed court date. While this may be better than no penalty at all, empirical evidence has shown that hands-free devices are no less of a cognitive distraction to the vehicle operator than those that are hand-held.

Although the task of mitigating driving distractions in this country is a formidable one, mitigating a company’s exposure to vicarious liability is often quite manageable under the guidance and knowledge of the right insurance professionals. A reputable insurance carrier with experience operating in the transportation marketplace can provide its insured with loss prevention services that can help identify and decrease potential vicarious liability exposure by working with the company to develop an appropriate policy, such as a cellular phone policy. While adopting a company policy does not necessarily absolve an employer from any and all liability, there is no question that an employer with a policy in place will be in a better position legally than an employer who does not. The truth is that courts recognize a company policy as an indication that the employer discussed with employees the importance of this issue. 

S.H. Smith & Company offers a Public Transportation Program and currently serves as the program administrator for the National Public Transportation Program and is underwritten by Zurich in North America. S.H. Smith & Company is one of the largest privately owned specialty brokers in the country and the largest in the Northeast. Together with Zurich—the fourth-largest commercial property-casualty insurance company in North America—we have worked to create a much-needed public auto insurance program. Inclusive of charter bus & motorcoach operators, intra-city buses, tour buses, sight-seeing operators, school buses and more, we have the ability to underwrite automobile liability, general liability and excess liability.


CONTACT US

S.H. Smith & Company’s knowledge base, coupled with Zurich’s extensive coverage, makes our National Public Transportation Program one of the best in the industry. Let S.H. Smith & Company and Zurich provide a competitive policy to your insured.

Distracted driving is a serious issue; make sure your client is covered. To learn more about this program, please visit www.shsmithpublicauto.com or call us at 800-356-0168 for more information.

The information in this publication was compiled from sources believed to be reliable for informational purposes only. All sample policies and procedures herein should serve as a guideline, which you can use to create your own policies and procedures. Any and all information contained herein is not intended to constitute legal advice and accordingly, you should consult with your own attorneys when developing programs and policies. We do not guarantee the accuracy of this information or any results and further assume no liability in connection with this publication and sample policies and procedures, including any information, methods or safety suggestions contained herein. 

* Insurance coverages are underwritten by individual member companies of Zurich in North America, including Zurich American Insurance Company. Certain coverages are not available in all states. Some coverages may be written on a nonadmitted basis through licensed surplus lines brokers.

S.H. Smith & Company was founded in 1982 and is one of the largest independently-owned specialty lines brokerages in the country and the largest in the Northeast. Our structure is that of four separate wholesale divisions: Professional & Management Liability, Large Commercial Property, Casualty & Environmental, In-House Underwriting, and Programs. We offer unmatched abilities in market selection and policy construction, as well as customized and innovative product solutions. Our unique structure of local offices teamed with regional sales representatives throughout the country allows us to provide the best service and knowledge base possible to our clients.