Posted December 27, 2016 by Administrator
Insurance rates rose substantially for trucking companies in 2016. And while trucking companies as well as independent-operators have felt the sting of rising costs, the consumer will soon feel the pain of increasing transportation prices that show up in higher costs for consumables.
There are several factors that have had an impact on the rising insurance rates in America.
- Insurance premiums have increased 10% – 30% as a result of very high legal settlements.
- Major companies (like Zurich Insurance Group AG and American International Group Inc.) have eliminated for-hire policies, making it harder for trucking companies to secure adequate coverage.
- New food handling transportation requirements instituted by the Food and Drug Administration (FDA) have increased liability for trucking companies.
- Lesser settlements – in the $25,000 – $75,000 range – are also having an impact. Even though they are lesser amounts they are often not litigated because the cost of litigation does not make it worth taking them to court, even though many times the trucking company was not at fault.
- Frivolous suits are another frustrating factor because they consume resources and needlessly inflate insurance rates.
The negative risk exposure for trucking companies has translated into a renewed emphasis on safety. Safety is no longer just for safety’s sake (although it is extremely important in its own right.) Safety today has a major impact on the bottom line for the company and therefore is a business imperative. Not only are insurance premiums impacted, but safety mitigates risk which is now a significant financial factor for the trucking industry.
Insurance firms today are clear – they want to see motor carriers cultivating a culture of safety. Safety must become a core value of the company, not just a priority. A core value indicates permanency; safety has to be non-negotiable. No matter what conditions are placed on the freight load, it must be safely transported from start to finish no matter what.
Trucking company leaders need to back up the core value of safety with financial supports. For example, one safety feature that companies are installing are in-cab video systems that can provide video proof of driver actions in the case of an accident. That type of information can help drivers improve their safety practices. In-cab video – and other safety technological tools – cost money but are a good investment on the part of the company leadership.
Truck drivers themselves need to be empowered to make safety judgment calls without fear of recrimination. They are on the front lines and need to know they can challenge issues when they see them. Focusing on safety as fundamental to the trucking company or driver will help to mitigate insurance premium increases and will, ultimately, benefit everyone.
Cline Wood is a national commercial property and casualty insurance agency that serves the commercial agribusiness and trucking industries. To learn more about Cline Wood and how we can help your business mitigate your insurance risk, contact us.
Posted March 27, 2015 by Administrator
Cline Wood specializes in a wide variety of coverages to suit the needs of the transportation industry, from independent owner operators to large nationwide fleets. Beyond coverages, we understand the needs, concerns, and challenges of commercial vehicle operation in 2015. To gain some useful knowledge, check out some of our popular blogs on the subject, including:
- Transportation Rules and Regulations: Distracted Driving
- Transportation Safety & Being a Positive Presence on the Road
- Protect Your Transportation Business from Negligent Hiring Claims
- Trucking Insurance in the Energy Sector
For more on these and other important topics related to transportation safety and insurance coverages, visit our blog again soon or contact us today.