Commercial Vehicle Insurance

SafetyFirstAn interesting article titled “Insurance: You Can’t Avoid Risk” appears in the September 2014 issue of FleetOwner.

This article caught my attention at the second paragraph:

Crashes involving trucks and the resulting insurance claims can grab quite a chunk from the bottom line of any motor carrier [or any company operating a fleet of vehicles – SF]. According to data compiled several years ago by the Federal Motor Carrier Safety Administration (FMCSA), the cost of a crash involving one Class 8 tractor pulling a single 53-ft. trailer runs to $172,292.  If just one person gets injured in such a crash, the average cost balloons to $334,892.  And if a fatality occurs in such a crash, the average cost skyrockets to over $7.6 million.

The article also comments that insurance costs to cover premiums and out of pocket costs can be as much as 4% of the total cost of operation (TCO).

PoliceFleets looking to reduce their costs can ask for discounts and creative payment plans, but in order to materially reduce insurance expense, the only long-term solution is to earnestly work to reduce their risk of loss through aggressive and tailored crash-avoidance strategies.

Naturally, we can’t control how the general public drives on any given day, but as transportation safety professionals, fleet management teams can work with their commercial drivers, insurers, and current safety vendors to increase results.

Ideas to consider:

  1. Smash through the most common barrier to results: complacency. Many fleet teams think they’ve done all that they can and sometimes it can be hard to re-evaluate and re-tool programs to get better results.  “We’ve always done it this way” and “don’t fix what isn’t broken” are dangerous phrases if you’re sincere about enhancing risk results. It’s easy to assume that everything is working well and focus on trying “new stuff” just because it’s new and trendy, but sometimes it’s the underlying (un-sexy) tasks that are slipping through the cracks.  Be honest in evaluating what’s working and what could work better.
  2. Increase vigilance and safety awareness – just as consciously scanning the road ahead for possible hazards and motorists who may cut off trucks is critical to safe driving, management teams also have a responsibility to forecast ways to increase safety in their operations and processes.  Careful analysis of past crashes and understanding what might have contributed to them happening from a process and systems standpoint may uncover opportunities to improve your management strategy.
  3. Develop an even stronger communication strategy with drivers – not just talking at them or demanding more from them, but also learning to listen carefully to their feedback about what’s working and what’s failing to work as well as it could or should. Understanding what processes and systems keep drivers from excelling at their job and helping them with appropriate assistance could be an area to leverage.
  4. Integrate technology where it will help the most.  Technology can be applied in most fleet operations to help deliver insights into ways to increase efficiency or improve safety factors.  The trouble is that for most fleets technology can be disruptive as well. There’s a learning curve to adopting new systems and there must be vigilance in translating these data packets into meaningful management action.  If the follow up isn’t helpful to drivers or other team members, then it may not be worth the effort. One example could be adopting an online education program to refresh drivers on basic safety issues.  If the program is difficult to access, or the videos are tedious, too long, boring or poorly executed then drivers won’t pay attention or change habits.  Investing in a system that is easy to use and has interesting, short programs may be a better course of action.
  5. Actively monitor / manage your CSA scores.  While the CSA score isn’t the best indicator of operational excellence, your team shouldn’t ignore this score, either.  The Bookend BASICS have been discussed elsewhere on this blog — Unsafe Driving and Crash Rate.  When the bookends are firmly managed, the stuff in the middle tends to sort itself out, too.
  6. Don’t be shy in asking for help from your insurer.  Most insurers offer loss control support in various ways — consultants, technical bulletins, and other resources are available but only if you ask for them.  Agents can review your current policies to make sure you have appropriate coverage, and help you navigate the service offerings that come with your policy to be certain you’re getting the maximum benefit for the cost you’ve already agreed to pay.
  7. Leverage your existing safety vendor relationships. Many fleets already work with safety support vendors on issue ranging from log auditing to DQF maintenance.
    1. Are you using the most current service offering from each vendor?
    2. Are there new benefits or features that you could be using?
    3. Does your vendor offer a support network, webinars, or other meetings that could introduce new ideas or help you network with peers in order to increase safety results?
  8. Join, and participate in, a vehicle safety networking group.  Hearing about other peer’s experiences can help you save time, get to decisions more quickly and leverage other professionals learning lessons (why make the same mistake, or why not benefit if they’ve already proven something works well?)  Of course, this commitment works best when you’re an active participant – sharing with the group your own experiences.  It won’t work as well if you join and then lurk in the shadows quietly.

Managing insurance costs is important.  You want to have the right coverage for when things go wrong unexpectedly, but you also want to do whatever is practical to avoid claims or keep their costs as low as possible.

There are many safety articles at this blog site to give you more ideas on ways to prevent crashes.

Let us know what you do that works well at your fleet!

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