5 More Insurance Best Practices to Help Stabilize Your Premiums

Preventing “Nuclear Verdicts”

This week I attended Idelic’s Preventing “Nuclear Verdicts” webinar. Idelic is a driver management platform.

I learned almost any sized trucking company can be involved in a large claim. The possibility of any realistic tort reform in the near future is uncertain. Until that happens, multi-million dollar verdicts, the so-called Nuclear Verdicts, will continue to plague anyone with their own trucks on the road.

What is certain is that the larger trucking companies (who mostly self-insure), would like to raise the $750,000 insurance requirement for all companies. This helps the larger motor carriers because raising the primary insurance means fewer of the large losses would be shifted to “excess” coverage (covering losses over the $750,000 threshold).

Like most political solutions, this one will probably end up as some sort of compromise, resulting in, sooner or later, higher coverage requirements and higher costs. How high is anyone’s guess.

While that’s all getting sorted out, there are things you can do to stabilize your insurance premiums.

One crucial response is to adopt industry best practices—proven techniques to streamline and improve your business.

To succeed in this business, as one business guru said, you don’t need a bigger checkbook, you need a bigger idea book. Not every idea will work because every business is both similar and very different to any other business.

You don’t need a bigger checkbook, you need a bigger idea book.

But if even one in five ideas are productive, then that’s a 20% advantage you have given yourself. Best of all, you can decide whenever you want to implement the new initiative. Proceed at your own pace.

Without further adieu, here are the next five ideas.

5 More Insurance Best Practices

2021 Insurance Saving Tip #25

Relocate to another state with lower rates.

Premiums can vary by state for like or similar operations. While moving seems drastic, and no agent is ever going to make this recommendation, some owners have told me high insurance rates have prompted a physical move of their business to another jurisdiction. Some states, like Florida, are notorious for higher commercial auto insurance premiums, while others, like—surprise, surprise, California—have better competitive rates due to a greater volume of business.

Some fleets have found they can serve their customers better by establishing a beachhead in another state and gradually shifting over their operations.

This can be a real option if you are located near the state border and such a move would not be particularly disruptive to the business, or if you have a dedicated lane ending in a state with lower-premiums.

2021 Insurance Saving Tip #26

Be 100% transparent in your dealings with your insurance partners.

There is ofttimes a fear amongst some organizations that, if they are asked an insurance question, the response always needs to be tailored in a certain way or else something negative will result (higher premiums, increased scrutiny, and the like).

An example is the owner of a new startup, who declares affirmatively in a post-bind safety review, that they have met or exceeded every safety and regulatory standard, each employee is stringently vetted and thoroughly trained, and all equipment is daily inspected and frequently maintained.

Contrast that with the owner with 10, 20 or 40 years in business who has perhaps gone through dozens of reviews. In my experience, I hear fairly candid answers and get honest pushback. “No, we don’t have any training videos. Can’t afford them.”

Who is more believable?

Secondly, some insurance questions might not always apply to your operations. It’s possible the electronic form won’t permit any further progress unless the question is answered.

Thirdly, if you really fall short somewhere, all the insurance company expects, if it’s really something serious, is to correct it in due time. That’s all. No worries.

Top companies do their part and make transparency their cornerstone for better insurance quotes and exceptional levels of service.

2021 Insurance Saving Tip #27

Be aware of all of your risks (exposures) and have a risk management program in place for those risks . . . before insuring them.

Often a business evolves as new opportunities present themselves. For example, a taxi-crane company starts renting telehandlers to contractors (but perhaps doesn’t inform the insurance company). Or a dry van operation adds open deck trailers, then drop deck or even RGN trailers to do heavy haul. In these instances, the risks have increased for both the business and the insurance company.

Agents are not always keen on the particular subtleties of equipment, and the resulting risks/exposures from its operation. In addition, not all agents necessarily have had training in risk management for your particular line of work.

What to do?

• Start by knowing your risks and what needs to be done to address each of them on an ongoing basis. For at least the first six months, adding different types or classes of new or unfamiliar equipment always represents additional risk for your company and its risk partners.

• Be sure to have a comprehensive risk management program or plan in place to manage your risks and exposures, and to lessen your company’s exposure to risk. Take baby steps, before leaping any tall buildings.

Once the risks have been nailed down and a plan is in place to manage each risk, insurance can take over from there, bearing any of the risks which you cannot sustain.

2021 Insurance Saving Tip #28

Ensure vehicles and equipment are secured 100% of the time when they are parked or garaged or not in use.

Did you know one-third of stolen vehicles had the key or fob left inside?

Do you permit drivers to garage them at or near their homes?

Did you know nearly 40 percent of all cargo thefts occurred in parking lots or garages? (2017 FBI Report) Do your trailers have an anti-theft device, if dropped outside of a secure yard?

Does your yard have surveillance cameras including video and OCR or LPR?

Are drivers instructed where to park or never park: i.e., center turn lanes, ends of rows or congested areas in truck stops, blocking lanes, etc.?

Have you invested in adequate anti-theft and tracking devices?

Do you have a second tracking device hidden in the vehicle, including any trailers?

Do you have a parking/garaging policy guiding drivers?

These are a few of the best practices your insurance partner would like to know more about.

In summary:
• Give careful thought and consideration as to where vehicles are, 100% of the time they are parked, positioned, or garaged.
• Invest in anti-theft equipment and tracking devices.
• Security needs to be embedded in your safety culture.

2021 Insurance Saving Tip #29

Have an aggressive equipment replacement policy.

While some business owners can make valid arguments for keeping older equipment on their books, based on minimal usage and superior maintenance, the fact is, there are some serious trade offs to consider. No matter the type of equipment, be it for heavy-lifting or heavy hauling, newer models come with an array of safety devices.

• In many instances, older equipment cannot be successfully upgraded or retrofitted with this new safety technology.
• Even highly-maintained, older equipment can be prone to breakdowns and faults, and replacement parts can be scarce, directly affecting the bottom line.
• While there are always rare exceptions, valid business reasons to keep equipment on the books after 30 years or more, are as rare.

If you need to deploy older equipment:
• Do you have a rigorous inspection and PM program?
• Are all inspections & repairs fully documented?
• Is there a written service plan for each unit?
• Are any third-parties involved in the service process?
• When stored, is the equipment protected from the elements?

Having a great maintenance program is helpful. Having a great and fully documented maintenance program is always better. ■

Thank you for reading this.