How Much is the Average Cost of a Truck Accident?
This blog post is the 3rd in a series of five blog posts about creating driver engagement.
When exploring the total cost of a truck accident and how it can affect your company, we need to explore past the basic surface costs, as the answer to this question is much deeper than you may realize. First, we have to recognize that there are many types of costs associated with an accident, starting with visible (direct) costs and hidden (indirect) costs. Further, there are human, psychological, and environmental costs which not only impact your workforce but our total economy too.
Average Cost of a Commercial Truck Accident
A recent article stated that the average cost of a commercial truck accident with one injured person is $148,279. This cost goes up to roughly $7 million when the accident involves a fatality. These numbers multiply if more fatalities or injuries occur.
Let's break it down between direct and indirect costs that your company will feel when a driver is involved in a truck accident:
DIRECT COSTS OF A TRUCK ACCIDENT
Property & Damages
- Cargo Damage
- Vehicle Damage
- Towing Costs
- Storage of Damaged Vehicle
- Injury Costs
- Medical Costs
- Cost of Insurance Increases
- Immediate Loss of Revenue
- Administrative Costs
INDIRECT COSTS OF A TRUCK ACCIDENT
Ongoing Loss of Revenue
- Loss of Clients or Customers
- Lost Sales
- Meetings Missed
- Salaries Paid to Employees in Accident
- Lost Time at Work
- Cost to Hire or Train Replacement Workers
- Government Agency Costs
- Damaged Equipment Downtime
- Accelerated Depreciation of Equipment
- Loss of Personal Property
- Vehicle Replacement
- Accident Reporting
- Fines and penalties
- Medical Costs
Damage to your Reputation
In addition to increased public relations costs, and with the rise of social media's influence on spreading the negative publicity and poor public relations, a further impact can be made on a company's goodwill. For instance, the 2019 airplane crashes (two within 6 months of each other) have become a PR nightmare for Boeing, the world’s largest commercial aircraft manufacturer. The incidents led to a long and costly road to recovery, roughly between $30-$40 billion to re-establish the company’s reputation.
HOW MUCH REVENUE IS LOST WITH A TRUCK ACCIDENT?
The answer to this question is nothing short of staggering. Hidden or indirect costs can be four to ten times greater than the visible or direct costs. It is absolutely crucial for companies to realize the incredible impact of hidden costs of a truck accident and not to mention, the amount of revenue that must be generated to make up for lost profits from these hidden costs.
The cost of a truck accident is a controllable cost that can directly affect the company bottom line. When profit margins are tight and competition is intense, the ability to control accidents is vital. The importance of an improved workforce safety initiative, which would result in reduced accidents and injury costs, results in taking a substantial amount of money back to the bottom line.
Employee Engagement Leads to Fewer Safety Incidents
As you can see, the true costs of truck accidents can be staggering, and not just direct costs, but also indirect costs too. The good news is that employee engagement methods can be used in the transportation industry to decrease these accidents with the potential to have a considerable positive impact on a company’s bottom line and overall image of the company.
Distracted driving is the #1 cause of crash accidents and along with following the regulations set forth by the FMCSA, increasing driver engagement is a great way to reduce driver distraction and safety incidents. Click here to see how improving your employee engagement can be used to increase your bottom line.
Need Help Engaging your Drivers?
If you’re looking for ways to engage your truck drivers and improve the safety of your transportation employees then sign up for a complimentary, no obligation consultation with us today. We are happy to help!
At C.A. Short Company, we are your partner for increased employee engagement resulting in increased performance outcomes to grow your bottom line. Our process and research-based platform helps you engage your team in order to increase your bottom line, motivate your staff to the benefit of the entire organization, and reward your people for the positive changes they make. To request a Complimentary Consultation, please click here.
This blog was originally published in 2015 and has been recently updated.