Gulfshore Insurance is pleased to bring you this eye-opening series that explores the rise in commercial auto insurance costs; factors impacting the rise in claims; and solutions you can implement to help combat the situation. If you have any questions or concerns, don’t hesitate to contact one of our trusted advisors. Click below to read previous articles in this series:
- Article 1: Navigating the Road Ahead for Commercials Auto Insurance
- Article 2: What’s Driving Auto Loss
- Article 3: More Accidents, More Dollars
With commercial auto insurance rates continuing to rise and no end to this trend in the near future, it is important that companies understand the solutions and best practices available to help alleviate the bumpy road auto insurance has become. These four best practices can help you keep your commercial auto insurance expenses under control.
- Focus on Fleet Safety
- The drivers and the fleet you put on the road are key considerations when an insurer assesses your commercial auto risk. Implementing a proactive Fleet Safety Program will create a strong foundation for controlling your risks and exposures from potential fleet auto accidents. A Fleet Safety Program will help establish standard safe driving procedures and expectations, thereby reducing your risk of liability, and will also communicate management’s commitment to the safety of your drivers and other motorists.
- Combating distracted driving by implementing a Distracted Driving Policy as part of your overall Fleet Safety Program should also be a top priority for all companies. Organizations that fail to create and enforce policies prohibiting employees from using their phones while driving put workers in jeopardy and increase employer liability, according to the National Safety Council. Policies should be practical, enforceable, and designed to protect employees and employers in all possible scenarios. A best-practice cellphone policy should cover all employees, both handheld and hands-free devices, company vehicles, company cellphones, and all work-related communications. The National Safety Council offers a free policy kit with information you can use to establish or strengthen your company’s policy.
- In addition to a Fleet Safety Program and a Distracted Driving Policy, companies should utilize Vehicle Usage Agreements for both company-owned vehicles as well as personal autos. Vehicle Usage Agreements outline the conditions and expectations a company imposes upon its drivers while operating a company-owned or personal vehicle. These policies should clearly define which uses of the vehicle are appropriate and which are not, as well as other requirements of the vehicle custodian, and the expectations of drivers while operating their own vehicle for business purposes.
- Remember, both the drivers and the fleet you put on the road are key considerations when an insurer assesses your commercial auto risk. That’s why you must also have stringent Driver Selection criteria. Here are 10 tips on how to best execute the driver selection process. It is critical to run Motor Vehicle Records for all company drivers. This should be done annually at a minimum, but quarterly checks are recommended. We recommend continuing to monitor driver records after hire, and implementing a continuous driver training program.
- Invest in Safety Technology
- Insurers like to see fleet management and safety technology such as telematics systems, dash cams, cell blockers, systems that track real-time data and driver behavior, and rear-view cameras and sensing equipment. Studies show that telematics and other new technologies reduce the frequency and severity of losses. Monitoring drivers improves driver behavior when it comes to complying with speed limits and reducing rapid acceleration and hard-braking events, saving fuel. Other benefits include tracking routes, charting more efficient routes, and lowering miles driven across the fleet, which reduces fuel and maintenance costs and contributes to lower claims.
- Remember, feedback from technology must be acted upon. Disregarding the data received from technological fleet monitoring systems can lead to a form of liability called a “negligent entrustment.” The feedback from fleet technology must be consistently reviewed, and action must be taken should any driver violations be discovered.
- Know Your Loss Experience
- Implement standards for after-crash procedures, accident reporting, and accident investigation. The information garnered from having these procedures in place can be critical in identifying potential poor driver behaviors.
- Review your auto losses on a quarterly or semiannual basis. Look to see whether there are trends in the types of accidents (rear-end, side-swipe, backing, etc.), times and days of the week the accidents took place, the routes in which the accidents occurred, types of vehicles involved in the accidents, and the employees involved in the accidents. If trends are identified in any of these areas, implement safety training to specifically address the trends and recalibrate routes and drivers, if necessary.
- In addition to negatively impacting your Commercial Auto premium, any auto losses that result in injuries to your employees affect your premium further by increasing your Workers’ Compensation Experience Modification Factor, which could affect your ability to procure competitive coverage at all. Work with your broker and claims adjuster to stay on top of your losses, and make sure all claims stay on track and do not languish.
- Partner with Your Insurance Advisor
- Organizations who partner closely with their insurance and risk management professionals to understand these risks – and the consultative support and tools available to manage them – will be better positioned to protect their employees, fleets, and businesses. With rates at an all-time high, commercial auto policyholders should consider utilizing a consultative approach and tools to better manage their transportation exposures.
At Gulfshore Insurance, we strive to share information with you to help you keep on top of important issues that may impact your business. Our trusted advisors can help you determine what programs and risk management practices should be put in place to help overcome the bumpy road auto insurance has become. Contact us. We are here to help!