Trucking is an essential component of the U.S. economy. Trucks and their drivers traverse millions of road miles each year, delivering millions of tons of goods to distribution centers and consumers. With all those miles traveled and the sheer volume of cargo transported, trucking companies face a myriad of risks. While truck insurance serves as the backbone of risk management in commercial transportation, trucking fleet owners have many other risk management tools at their disposal. In this first of a two-part series, we will explore risk management strategies designed to reduce claims against trucking insurance policies.
The Importance of Fleet Risk Management
Why should fleet owners be concerned with risk management? The answer is simple: by adopting the processes and procedures needed to reduce risk, the entire operation runs more efficiently and at less cost. Trucking owners know that a single incident – a collision with another road user, a lost or damaged load, a driver injury – can result in hundreds of thousands or even millions of dollars in losses. Trucking insurance covers many of those losses up to the limits set in the policy. Supplementing that insurance protection is the principle of preventing incidents from occurring in the first place; keeping a check on rising operational and liability expenses. In basic terms, fleet risk management is about adopting a safety-oriented culture that protects drivers, vehicles, and business assets.
Implementing a Top-Down Culture of Safety
Trucking operations are risky. To better protect the drivers and vehicles fleet owners rely on, adopting a safety-oriented culture must touch every stakeholder in the operation. The four key components of safety in trucking are:
- Driver qualifications – selecting the drivers who meet all established certifications and experience for the vehicles/cargoes used in the operation.
- Safe driving practices training – initial and ongoing training can significantly reduce the occurrence of on-the-road incidents.
- Accountability – drivers, managers, and owners must be accountable when issues arise.
- Corporate investment in safety processes – implementing safe operational practices is not an overnight solution; it takes time, finances, and commitment to be done effectively.
It is important to understand that risks evolve in trucking operations. As a result, fleet owners must apply both flexibility and creativity in their safety programs to meet the changing needs of the industry and the operational environment. Safety processes must be reviewed and updated periodically, helping to support the protections of trucking insurance and other risk management tools.
Selecting The Most Qualified Drivers
The first of the four key components of safe operational practices is that of driver qualification. Drivers are at the center of operations in commercial transportation businesses. To ensure smooth, efficient, and safe operations, attention must be focused on identifying and recruiting the most qualified drivers.
To do so, human resource personnel have access to motor vehicle records (MVRs) and background checks for drivers. By leveraging these tools, drivers with poor safety records can be screened out before a job offer is made or employment continues for the driver.
Qualification of drivers is dependent on the type and size of vehicles being operated as well as the cargoes being transported. Tank truck drivers or drivers hauling loads of hazardous materials may need additional certifications to remain in compliance with state and federal transportation regulations. Fleet owners must ensure all necessary certifications are current and applicable to current operating conditions.
One of the issues that often arises is the self-reporting requirement in the Commercial Motor Vehicle Act. According to the Act, a driver is required to report his or her conviction for any traffic violation to employers within 30 days of the occurrence. It is imperative that fleet owners do their own monitoring. Industry professionals recommend periodic MVR reviews, at least annually, to ensure that drivers for the company have not been convicted of a driving infraction. Failure to self-report, or failure to follow up with periodic MVR checks, can result in steep regulatory penalties or even loss of licensure. For fleet owners, these factors can interrupt supply chains and ultimately result in expensive claims against truck insurance policies.
In part two of this series, we will explore the remaining safety components in more detail. By adopting safe practices at all levels of the operation, fleet owners can better protect their businesses.
About Western Truck Insurance Services
Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more!