Sign Here

Sign Here ... in Blood!
Vehicle Signage - A Good Idea? [ Back To Table of Contents ]

by Peter Schlactus, CIC, AAI

At a recent courier convention, one of the seminars focused on how to market your company by putting signs with your
name on your vehicles. Vinyl signs, magnetic signs, reflective signs ... what an efficient way to get your message out! The
gentleman spoke persuasively, even passionately. It was, after all, his business.

I appreciate the potential advantages of using vehicle signage. Under certain circumstances, I feel sure that it can be a
great idea. What made me uncomfortable was not what was being said, but what was not being said.

The equation changes depending on your operation. For example, if you own or lease heavy trucks, you have less to
worry about than if you use contractors who drive their own vehicles.

Questionable Benefits
I cannot speak with too much authority, but as a member of the buying public I have to question the extent of the benefits
that signage brings.

When delivery vehicles are parked or moving normally, they tend to blend into the background of the urban landscape.
They get noticed mainly when something is amiss. You, as a transportation industry insider, pay more attention, but
signage is not for your benefit!

Certainly, vehicles with signs can leave their 'mark.' Everyone knows what a UPS van or Dominos' car looks like. But these
are huge fleets, omnipresent, supported by extensive television advertising images. When your van speeds by, how many
people will whip out a pen to dash off the telephone number printed on its side?

Even the most impressive benefits do not exist in a vacuum. As you think about it, remember that signage brings with it
three different types of problems: image, legal/insurance and regulatory. Let's consider each.

Image Problems
The primary reason for placing signs on your vehicles is to publicize your company and communicate a more professional
image. Ironically, publicity also can have the opposite effect.

Consider the media attention given to bad accidents. Some say that any publicity is good publicity, but how many readers
would want to trade places with the Midwest courier whose truck - emblazoned with its name and logo - was featured on
the evening news jackknifed on a bridge after an accident, and causing horrific rush-hour traffic snarls?

A New England courier company was similarly mortified to discover its truck on TV. A manager had let the driver keep the
truck at home over the weekend. The driver disregarded company rules, took his family out in it and drove into someone's
kitchen! The only consolation of the company's general manager was the thought that, at least, the truck was a rental and
did not carry a company sign.

In addition to negative media publicity, vehicles that get into accidents become roadside spectacles. Do you want rubber-
necking drivers who slow down to view the accident scene to be treated to a prolonged dose of your company name, logo,
slogan, etc.? More people probably take notice of you in this situation than notice your entire fleet during months of
normal operation.

A third type of negative image-building occurs when your drivers roar by pedestrians or cut off other drivers. Courier
drivers who aggressively pursue their delivery goals may not even realize what they have done. Nonetheless, the other
party is left feeling threatened and angry. Your sign gives them something on which to focus that anger: you!

Putting your name and phone number on delivery vehicles exposes your company to
additional liability risk. And that's not all. Transportation companies need to weigh
carefully the benefits against the risks.

Legal/Insurance Problems
Besides the negative publicity, delivery companies using vehicle signage must expect to become embroiled in more and
larger lawsuits and insurance claims.

You will, of course, be involved in all accidents involving your owned and leased vehicles. By fostering the more "corporate"
image you wanted, signage may also create the image of deeper pockets. Seeing this, injured claimants may seek more
"ambitious" compensation from you.

In addition, marked vehicles catch attention of theft and fraud rings. These professional criminals target delivery vehicles
for theft, hijacking or staging accidents. These accidents are schemes whose purpose is to extract big bucks from your
insurance company for faked injuries.

Some couriers have their owner-operators display company signage. Putting signage on these non-company vehicles will
almost certainly result in insurance claims and lawsuits that could have been avoided.

Most owner-operators - be they contractors or employees - understand that they are supposed to take care of their own
accidents. Typically, they exchange their personal insurance information with the other party and your business is never
involved. If your placard is on the vehicle, however, the fact that the driver was working for you may well come out. If it
does, you are much more likely to be drawn in. Even though your liability is secondary to that of the vehicle owner, your
legal costs can mount and the incident becomes part of your insurance record.

Only a minority of couriers put signage on owner-operated vehicles. Those that do, favor removable magnetic placards
placed below the driver-side window. This makes good sense because it allows the driver to remove the sign following
an accident. There is not always the opportunity to do this, however.

Courier companies always need to safeguard their insurance records. Too many remember how their insurance suddenly
became much more expensive - or was withdrawn entirely - after a string of losses. Insurance carriers are more than a
little paranoid about couriers, even in this competitive modern era.

Vehicle signage, especially on non-company-owned vehicles, can result in claims that push you over the edge.

Regulatory Problems
Another reason to abstain from using vehicle signage on owner-operator vehicles is its effect on the independent
contractor status of your drivers. According to transportation attorneys we have consulted, it is not impossible to
reconcile signage and IC status. It is, however, somewhat akin to walking a tightrope without a safety net.

Signage conveys the message that the driver represents your company and is under your control and direction. It also
leaves the impression that the driver works exclusively for you. These impressions undermine the presumption of
independent contractor status.

You should consult a transportation attorney regarding precautions that can be taken to minimize the chance that
signage could hurt you. Basic steps include making signage optional for drivers and paying drivers a separate fee for
displaying your sign.

Signing Off
With all the problems - publicity, legal, insurance and regulatory - associated with vehicle signage, why do some courier
companies endorse their use?

First, different business owners will always perceive risks differently. This is natural and good for the industry because it
encourages experimentation and innovation.

Second, so long as things go well I am sure that signage can have a positive impact. This article merely questions whether
the benefits are worth the risks. Some will answer "yes," but the odds tell us that - eventually - each of the companies
using vehicle signage will probably be brought face-to-face with the harsh realities described above.

So, before you "sign" up, make sure you are prepared to re"sign" yourself to the full consequences.

^{Peter Schlactus, a
Certified Insurance Counselor and
Accredited Advisor in Insurance, is Co-President of KBS International Corp.,
which provides specialized insurance programs, benefits, and
risk management services to courier companies and executives nationwide.
Mr. Schlactus is available to answer inquiries
at 1-888-KBS-4321 or via e-mail at peter@courierinsurance.com.}

COURIER MAGAZINE - March/April 1999 [ Back To Table of Contents ]