Making Insurance Pay
On Thursday, March 17, Gary Flaherty, head of Canal Insurance Group’s Risk Management Services, partnered with the Vertical Alliance Group and presented a webinar on how to make motor carrier insurance pay.
Canal, a privately held company with assets in excess of $1 Billion, and an A.M. Best rating of A- (Excellent), specializes in trucking insurance, especially for smaller, independent long-haul owner-operators (about 80%) as well as intermediate-haul and local firms. They insure all kinds of cargo, including petroleum products, but don’t insure anything that’s designed to explode (Class 1 Explosives). Canal operates in most states.
Loss Control as Cost Control
One sure thing, the more losses (crashes, collisions, and claims) your company experiences, the more your insurance premiums will increase.
But it doesn’t end there . . . increased DOT violations can also drive up insurance premiums.
Why? Because in many cases DOT violations can be controlled by having solid policies and procedures (P&P) in place, strong hiring standards, and an actively involved management.
Insurance should be considered an investment. “You have to put in what you want to get out,” said Mr. Flaherty.
And the investment is not just in writing a premium check when it is due. No matter which insurance carrier you deal with, you need to communicate well with your insurance team.
Who is on your insurance team?
- Outside Consultants
- Insurance Carrier
- Your company
Each team member has a role to play. The Agent, for example, knows stuff and may have resources he can provide. His job is to help you and to make you more appealing to your risk partner.
Compliance vendors can assist your company get its safety and regulatory house in better order.
Your insurance carrier may have Risk Management or Loss Control people, both in-house or outsourced who can point out areas of improvement (at no additional cost to you).
You, the Motor Carrier, however, have to hold up your end of the log by actively participating in the Risk Management/Loss Control process. Your involvement never really ends, “if you want to get anything out of it.”
The Loss Control Engagement
When will insurance Loss Control people contact you? Anytime:
- Prior to expiration
- Throughout the Policy Life-cycle
Tip: This is your time to shine— not shell up.
Nothing happens without people: introduce key staff members. Show your policy and procedures, as well as safety practices. Have you invested in any new technology as on-board cameras or electronic logging recorders?
Ask questions: How can I improve? What are any weak spots?
Push back— if necessary.
Have a dialog with the risk consultant.
Things To Talk About
What new and creative solutions can Loss Control provide? What kinds of data and analysis can they provide? New ideas?
What best practices do they recommend.Keep in mind each insurance company does things a little differently.
The Value Proposition
How do you get the most value from a loss control visit?
• Treat any recommendations with due attentiveness (especially those classified as Critical, or Important).
• It’s a two-way conversation. Sometimes information is not available at the time of the visit. Don’t be afraid to follow-up later.
Tip: Get the risk consultant’s contact information!
• Okay, so you haven’t been keeping good records on drivers or vehicle maintenance. The worse you can do is side-step or evade providing an answer. Every five years or about 1 million miles or so, a safety event may occur. If so, the regulators or litigators may see anything missing as a blatant attempt to evade safety regulations. It costs nothing to be transparent.
Experience lower costs/premiums.
• Expect a return on investment (RIO) on your efforts resulting in lower overall costs. Many safety initiatives result in additional productivity and other intangible benefits that cannot be easily measured.
Q & A Session
Gary Flaherty finished his talk with a question and answer session.
Q. What are the top three mistakes Motors Carriers make?
Hiring: standards may be too loose, or high, but not enforced.
Collisions: lack of a preventable collision program in which all collisions are investigated on the question of preventability.
Lack of proper investments: for example, now is the time to get on-board with Electronic Logging Devices (ELDs), not near the deadline.
Look upon your relationship with your insurance people as a partnership, communicate frequently, and see your premiums go down.
Thank you for reading this.
Disclaimer: One company that I work with in the area of Loss Control does business with Canal Insurance Group. Any expressed opinion’s are the author’s own and do represent any advice or suggestions of any particular group, person, or organization.
John Taratuta is a safety advocate and Risk Engineer. (989) 474-9599