Chip Magner is publisher of Commercial Carrier Journal. E-mail Lmagner@randallpub.com.
Coach John Wooden’s famous quote, “Do not let what you cannot do interfere with what you can do,” ought to be a rally cry for fleet owners facing rising insurance costs. While many consider the challenge of insurance rates insurmountable there’s still plenty you can do to assure the best possible scenario. The bottom line is risk management and your history of reducing accidents and losses. Your company’s safety incentive successes translate into the best possible insurance rates for your fleet.
It’s no great mystery that long-term employees have fewer accidents. Retaining and rewarding your safe drivers reduces the risk posed by new hires. Review your plans for motivating top performers. Document your safety programs and show your insurance provider how you’ve reduced accidents and increased safety. Get creative. One California trucking company issued raffle tickets to every department that went a month without filing workers’ compensation. The prize – a new motorcycle – brought everyone together in an effort to reduce accidents. At the end of the year, the company experienced zero worker’ comp claims and held a drawing for the motorcycle.
Carriers are always looking for ways to do what they can to reduce rates. Ernest Bortolotto, vice president and CFO for Refrigerated Food Express in Avon, Mass., runs a 100-percent owner-operator fleet. He tries to combat the premium increases with documented safety programs. He also finds that one of the things he can do is assess an insurance surcharge of 1 or 2 percent. “Some pay, some don’t, but you have to keep trying,” Bortolotto says.
Hugh Fugleberg, chief operations officer for Great West Casualty, says that insurance prices are directly based on a trucking company’s exposure to risk and their loss history. Trucking companies who take proactive safety and loss control measures and show a reduction in the severity and frequency of their losses will have a better opportunity for reduced insurance rates. He also says that improving driver-hiring standards, increasing driver training and installing safety devices on their equipment are other ways to get favorable rates.
Fugleberg suggests other ways for fleets to manage their insurance financing. “Other alternatives for performing fleet and non-fleet motor carriers include self-insurance, higher deductibles, aggregate deductibles (a combined deductible for tractors, trailers, and cargo) and retrospective policies,” he says.
Looking at a problem from every angle is a winning strategy for managing insurance costs. Do what you can and don’t worry about what you can’t do.