A mechanic test drove a customer’s vehicle to diagnose a problem. While listening for the problem, the mechanic got distracted and rear-ended another vehicle, seriously injuring the occupants.POTENTIAL CLAIM: $3.5 million

That claim might seem unrealistically high, but we have seen court judgments in cases like this rising at an unprecedented rate. Juries have been examining the facts and using high settlements to punish businesses for what they view as negligent or irresponsible behavior. In this claim, the dealership had not run a motor vehicle record (MVR) report on the mechanic prior to allowing him to conduct the test drive. If it had, the report would have revealed multiple accidents, speeding violations, and a DUI in the past three years. Here are some risk management tips for helping avoid crashes — and the high costs that could come with it:

  • Establish test-drive locations that have lower traffic volumes.
  • Create a policy that prohibits distracted driving while employees are driving for business purposes.
  • Where permitted by applicable law, order MVRs on all employees who might drive for business purposes.
  • Where permitted by and in accordance with applicable law, implement pre-employment and post-accident drug-testing policies.

Federated Mutual Insurance Company is recommended by 20 state and national auto dealer associations and buying groups for customized insurance programs and value-added risk management services, such as mySHIELDSM, the Risk Management Resource Center, and the Federated Employment Practices Network®. Visit or contact your local marketing representative for resources you can use to create or enhance your own risk management program.