Brian Fielkow

It’s time: Less talk and more solutions to trucking insurance crisis

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The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates. This is the first of two articles focused on the current trucking insurance crisis. The second article will be published Monday. 

Like the British monarchy and parts of the Middle East, the U.S. trucking industry rolled into the third decade of the century in relative chaos. The primary factor in the trucking situation is financial pressure related to escalating insurance costs.

Two related developments have exerted the most pressure. The first is the shrinking number of commercial liability insurers. The second is the growing number of “nuclear verdicts” in liability cases — i.e., those with jury-awarded penalties exceeding $10 million. In the first of two articles, I intend to outline the problem and the role operators can play in reducing risk and attendant cost.

My premise is straightforward: When confronting a challenge, it’s essential to focus on what we can control — solutions, not complaints.

Insurance companies are not the problem

Insurance is not the problem. Insurance rates reflect the condition of the applicable market. Blaming insurance companies is like blaming the mirror for the image it reflects.

You may not be the problem either.  Even if a company operates safely, insurance premiums, in part, are based on industry performance.  Most trucking companies care about safety, but we are all paying price for those who do not.

The number of insurers writing trucking liability has always been limited. But the problem is worsening, with more providers leaving the marketplace in favor of more profitable industries. This leaves trucking companies with fewer options and higher rates. Double-digit increases are routine, even for companies with solid safety records.

These pressures fueled many trucking company closures in 2019. A Fox Business report pointed to 795 carrier failures in 2019 impacting 24,000 trucks.

Become insured of choice

Trucking companies have a choice. They can remain stuck in their old ways and disappear or they can commit to thrive by approaching the insurance crisis as a significant opportunity. Smart operators who develop new approaches to safety and prevention stand to become insureds of choice and gain competitive advantage. The days of bare-minimum compliance-based programs and obligatory banners are behind us. The path forward is a genuine culture of prevention.

As safety experts and regulators have long advised, compliance does not ensure a safe operation. Operators need to create a culture that takes no prisoners and leaves no doubt about the role of every individual in creating a safe, profitable future. In a culture-driven organization, safety is neither a priority, a policy nor a program. It’s a nonnegotiable core value supported by incident-prevention strategies like these.  Safety is not a department – it’s a way of life.

Review your hiring practices. Are you hiring for the right characteristics — like a personal commitment to safety and a belief that individuals are accountable for their safety and the safety of their co-workers? If not, your employee roster may be filled with risk-takers who see themselves as above the law — and above your company rules.

Make a strategic investment in technology. Outfit every truck in your fleet with inward- and outward-facing cameras, which I believe should be required by insurers as a condition of favorable coverage terms. Avoiding one significant claim will pay for the equipment many times over. What’s more, cameras allow trucking companies to identify and root out bad behaviors.

Put safety above productivity. Safety is not an “either/or” proposition. Successful organizations must be safe and productive. Without the right culture, management and training, however, undue production pressure can lead to shortcuts, deferred maintenance and ignoring glaring risk. Adopt a policy — one with teeth — that states that productivity never trumps safety.

Listen closely. Early warning signs about unsafe conditions are everywhere; it’s a matter of heeding them. It could be the cry of a fatality or serious injury. Or it may be the whisper of a minor defect in a piece of equipment, a gap in employee training or supervisors who discourage reporting. Listen to the whispers and you’ll avoid the cries.

Prioritize purpose. Make sure your employees understand why they need to avoid shortcuts, use best practices and look out for co-workers. Employees must know the reasons for working safely and be aware of the impact of incidents on profitability, reputation and competitive advantage. Don’t be afraid to share statistics that highlight the costs of unsafe conditions and behaviors. Ultimately, safety is about people and families. It’s about coming home alive. 

Choose wisely. Perform due diligence to ensure your insurance provider has the right coverage, financial strength, programs and expertise. Shippers can be unwittingly dragged into accident litigation and having the right carrier behind you can make all the difference in the outcome. The quality of your insurance coverage is critical to you and your clients. The safest carriers will continue to have plenty of traditional and captive insurance options. These carriers will have lower insurance costs, thus securing a sustainable competitive advantage.

Do the right thing

Best-in-class companies that invest in safety and believe in culture will see strong returns on their investment. They know it is impossible to control every outcome.  So they focus on what they can control – people, process and behavior.

These companies know that good safety is good business. And they view prevention as a moral imperative, a matter of doing the right thing in the eyes of employees, customers and competitors. They understand that the current insurance crisis spells abundant opportunity for those who are willing to invest in a culture of prevention. Because they are proactive and are insureds of choice, they will communicate transparently with their clients, educate them and ultimately adjust rates to reflect double-digit insurance increases.

The losers will disappear. The winners will thrive.

With truckers closing their doors and financial pressures mounting, walking our industry back from the brink will take more than a strong safety culture. It also will require efforts to curb lawsuit abuse. I address this topic in the second part of this article.

Brian Fielkow is CEO of Houston-based Jetco Delivery and executive vice president of Montreal-based The GTI Group. He is co-author of “Leading People Safely; How to Win on the Business Battlefield.” Fielkow received the National Safety Council’s Distinguished Service to Safety Award, the council’s highest-level individual recognition.