Risk and Crash Management
Risk and Crash Quick Tips
- Develop a crash response plan ahead of time
- Train your drivers on what is expected of them after a crash event
- Work with a knowledgeable truck insurance provider
- Consider taking higher physical damage deductibles and even a liability deductible
- Report each loss event to your agent/Insurance carrier ASAP.
Without a doubt, insurance and risk management costs continue to rise for almost all fleets.
How can you find the most knowledgeable insurance agents?
Which insurance companies are the best for your company at it's current stage?
Do you have the most optimal coverages in place to help protect your company and the public?
Truck insurance and risk management are virtual minefields!
You don't have to be an insurance master, but you do need to understand the basics of what is required and what coverages you need to have.
Important Things To Consider
Primary Auto Liability insurance is required by federal regulations. Every carrier must carry liability insurance on every rig even on leased units.
Click the button below to see what insurance requirements are enforced by the FMCSA:
We know that it's tough to avoid chasing the lowest premiums. But, be aware that there are always trade-offs. A high-quality insurance professional will save you tens of thousands of dollars without even trying.
Selecting a good insurance agent isn't hard, but you need to invest a bit of time and effort into the process. Don't just allow anyone who calls up with a convincing "chance to save you thousands on your renewal" a chance to earn your business.
Just like in the trucking business, if you live on price you'll die on price. You have to offer competitive pricing against other motor carriers. But, what makes you better or different than your competition?
Always interview a potential insurance partner to ensure that their values align with yours and that they can spell out for you exactly what improvements they can make over your current program.
Ask them questions like:
"How many trucking clients do you work with?"
"How many similar trucking companies do you work with?"
"Do you hold any professional insurance designations like the TRS (Transportation Risk Specialist) or CIC (Certified Insurance Counselor)"?
Be clear about your expectations and don't just use other potential agents to help "keep your current agent honest".
It may seem like a good idea, but you could develop a reputation for being a "shopper" and soon no insurance company will want to waste their time in quoting your business. Trust me, its a real thing.
I'm not saying don't allow other agents to quote on your program. Just be transparent. If you're inviting/entertaining other options for your renewal, let your current agent know and explain why.
Absolutely fire an agent who waits until "the last minute" (like a day before the renewal date, etc.) to provide your renewal quotes! Sometimes things happen and this can't be avoided. But, this should NEVER be a regular practice.
Truck Insurance Basics
This is one area that all fleet safety managers and company managers need to revisit at least annually to make sure their needs are being met.
There are various factors that impact truck insurance costs, such driving records, your safety and compliance history, the ages of your drivers, the age of your equipment, commodities hauled, typical radius travelled, vehicle garaging locations, loss history, years of business experience and others.
There are several types of truck insurance coverages. Here is a brief rundown of the major ones:
(Just click on the little plus sign to the right to expand the information).
Primary Auto Liability insurance is required by federal regulations. Every carrier must carry liability insurance on every rig even on leased units.
Liability insurance protects you when a third party is injured in an accident. Generally, most carriers will be required to carry $750,000 in primary auto liability coverage, but almost every policy provides $1,000,000.
Owner-operators should ask when leasing onto a company who will pay for their truck insurance - the company or from driver weekly settlements.
A BMC-91 filing is a document that your auto liability insurance company will submit to the Federal Motor Carrier Safety Administration (FMCSA) on your behalf. This document certifies to the DOT that you have liability insurance coverage in force.
General Liability insurance protects the business for any property damage or bodily injury that might occur which does not involve a truck.
Typical examples of this would include the slip and fall exposure at your place of business, advertising related exposures, and some contractual exposures you may get involved in.
$1,000,000 in coverage is the norm for this line of business and it’s generally required by contracts with most shippers and freight brokers.
Non-Trucking Liability insurance pays for an accident when the driver/truck is not under dispatch. The coverage is sometimes referred to as bobtail liability.
Non-Owned Trailer Liability coverage protects the trailer you are pulling for someone else.
Motor Truck Cargo Legal Liability (Cargo) Insurance covers your liability to your shipper for damage/loss to freight in transit.
This coverage can have many exclusions such as theft from an unattended vehicle, theft limitations on target commodities such as garments, liquor, electronics, spoilage exclusions, water damage exclusions and a whole host of others.
It is very important to read your policy closely to ensure that you are covered for the goods that you will be hauling. You don’t want any unexpected surprises after a loss has occurred.
Generally, cargo liability coverage limits are $100,000, but $250,000 is becoming increasingly common.
Physical Damage insurance is coverage for your truck and trailer. Your premium is based on the value of your equipment as well as the other factors mentioned above.
This coverage is not required by law but if you finance your vehicle the lienholder will require it.
Don’t try to play games with your vehicle valuation as the insurance company will only pay the lesser of the actual cash value of the damaged unit, the cost to repair or replace the damage or the stated amount of the unit.
Non-Owned Trailer Physical Damage coverage insures the trailer you are pulling for someone else in the event of loss. $20,000 is somewhat standard for trailers.
Terminal Coverage protects freight located at specified terminals in the event of loss.
Usually there are time limitations related to this coverage. For example: 72 hours maximum per specified load. If the goods are stored longer than the terminal time you would most likely want to purchase Warehouse Legal or another type of bailee’s coverage.
Trailer-Interchange Liability coverage protects a trailer you are pulling when there is a interchange agreement in force. For example, with a steamship line.
Generally, $25,000 is a normal limit for this line of coverage.
The FMCSA also requires that all carriers maintain a record of accidents that shows carrier involvement for at least 3 years after the date of the crash.
Here is a free template that you can fill in and print out!