18 Sep What Every Transportation Company Needs to Know About Reducing Their Insurance Costs
One of the biggest challenges when it comes to insurance for transportation is combining the best rate with the greatest amount of coverage. One of the most common questions our brokers receive is, ‘how can I reduce my insurance costs?’ There are many factors that come into play when discussing premium costs for your transportation company. As experts in the transportation field, let us tell you some of the ways that we can work towards reducing your business’s insurance costs.
Safety Protocols
When we sit down with any prospect or current client, we want to know every part of their business. One of the most important parts of our brokers’ job is to ask the right questions at the right times. In a meeting, we try to find out:
- What safety protocols are already in place?
- Does the business have weekly safety meetings?
- Do they have maintenance logs where they’re doing pre-trip checks on their trucks?
We’re going to ask these questions and more when one of our brokers is meeting with any transportation business because they matter to the underwriter.
When a carrier is looking at any account, one of the first things they’re going to review are the safety protocols in place. This is one area where Byars|Wright can be a great resource. Not only will we help ensure that the business adopts the right protocols to reduce their insurance costs in the future, but we’ll accurately paint the picture to the underwriters so they understand exactly how hard you’re working to protect your employees and business.
Even if a business already has proper protocols in place, we can still help. We will fine-tune them, and we will go more in-depth with the business to make them even more profitable. It may take time to reduce costs significantly, but by partnering together, we will make it happen.
One of our best resources and value-added services for Byars|Wright clients is our in-house safety consultant who specializes in the trucking industry. Together, we’ll look at your business from top to bottom, starting with your owners and all the way down to your drivers.
When it comes to safety, and implementing the proper protocols, everyone has to be on board.
Every single employee has to buy into the overall safety picture and be involved in the process in order for it to be successful. This is vital to a trucking company and another reason why we want to build relationships with every person in your company.
The CAB Report
What has the biggest effect on premiums for your trucking company?
Any carrier will tell you, it’s the CAB report. It’s the first thing that any underwriter will look at when they are trying to write your business.
The safety reports of a business are going to weigh more heavily, or just as heavy, as your loss runs when it comes to the underwriting process. It provides a true picture of all the aspects of the business. Some things on the report that underwriters will look for include:
- What authorities do they have?
- What’s their safety rating?
- What are their inspections and violations?
- What are they hauling?
- Have they ever had inadequate insurance?
- Have they ever had severe violations?
- Have they ever had fatalities or injuries?
- What’s the number of power units?
All of these questions are answered by the CAB report, and it tells how and what a company is doing when it comes to its safety operations.
If an underwriter sees that a business has frequent violations, it could easily be traced back to not having the proper maintenance procedures.
Claims are not always an indicator of a company’s safety issues. It’s possible that they could just be lucky and not had to file any claims. That is why the underwriter will weigh so heavily on the CAB report…if they can see repeated violations, then from a carrier’s standpoint, they’re going to see the risk of a claim to be very high.
In the trucking space, it is very hard to hide anything from a carrier because every aspect of the business will be included in the CAB report. This report helps the underwriters determine which questions need to be asked in order to write your account.
Taking the necessary steps to improve your CAB report will make it more attractive, keep your drivers safe, protect your assets, and ultimately keep your costs down. Having an attractive CAB report is one of the best ways to make your business more profitable with reduced insurance costs.
Technology
In addition, implementing the right technology is a great way to reduce your costs. Due to rising litigation costs and settlements, it’s important to have your drivers protected with technology such as driver cameras.
Driver cameras have been a growing part of the trucking industry over the last five years. Carriers and companies in the trucking industry are utilizing technology as a way to decrease insurance costs, as well as help, maintain safety for their drivers. Most carriers have a partnership with a specific Drive Cam company that will offer significant discounts to utilize driver cameras within your fleet.
In many cases, we’ve seen the insurance company pay for the cameras because they want to promote safety within your business.
Not only does it help in the litigation process, but it also helps with your drivers. It gives the business owner an added look at how their drivers are doing, and drive cameras offer accountability for the driver to make safe decisions. Drive cams can also be a great tool as an employer because you can watch how your drivers are handling safety, and you can offer additional training if needed.
Your Drivers
When insurance carriers see an insured is taking proactive steps, such as hiring the best drivers, checking for good MVR’s, searching for solid CDL experience, and utilizing strong driver training, they are going to look more favorably upon your account during review.
Drivers are the lifeblood of the trucking industry. It goes far beyond just driving well and responsibly.
Once you get the best drivers on your team, it’s important to incentivize them to stay and to offer the proper training to help them succeed. The better trained your drivers are, the better they will be at recognizing issues with the truck. This leads to issues getting fixed and corrected sooner. Thus, your inspections will have better results.
Don’t overlook the importance of having great drivers and how valuable they can be to making your business more profitable.
A Hardened Market
Even if you are doing everything right, you’re still subject to the current market. Unfortunately, we’re dealing with a hardened market, and we have been for a while.
Whenever you have a hardened market, insurance costs go up, but your actual market and pool of companies that want to write your account will go down. When there are so many lawsuits and so many claims during a period of time, you’re more likely to have a hardened market.
Even so, you will stand out if you’re an attractive trucking company. What we mean by that is… when we’re in a hardened market, there’s already a smaller pool of companies that will want to write to you. So, when we’re trying to paint a picture to a carrier, we’ll still have multiple carriers/prices because of how you’re operating your company. That’s the key to getting the best rate.
In conclusion, getting reduced insurance costs for your company can be a marathon…not a sprint.
It takes a valuable partnership with a knowledgeable agent to make sure that your business will appeal to underwriters. At Byars|Wright, we will take the time to learn the ins and outs of your business. We will take the time to curate a strong relationship with your company so that we can paint the best picture possible for the underwriter.
Taking the time to implement the proper safety protocols, spending time improving your CAB report, introducing new technology, and hiring the right drivers will all be key ways to reducing your costs, and in the end, they will make your business more profitable.
