Implementing and maintaining a proper safety culture is no different, and once it is in place and operational, you will not only have a safer and more productive working environment for your employees, but you will also truly have taken steps to set your company apart from your competition.
By Nathan Brainard
One of the most common questions we as insurance professionals get from our clients is, “What can I do to lower my premiums?” It is a fair question, since generally your insurance premiums are one of the top three to four expense items for a company, and unfortunately, it does not look like auto insurance will be more affordable any time in the near future. So, how can you set your company up for the best possible terms of coverage and the lowest possible premium? Below are a few things you can use as a guide. By no means will these items alone be enough to lower your insurance expense, but items like these when coupled with other “best practices” often do make a difference.
It is important to remember underwriters not only look at your individual company when considering offering terms of coverage, but also how the industry is trending and what their past experience has been (i.e., have they been able to make money). You want your company to stand out above the other industry submissions the underwriters have seen and one of the best ways to do this is by having a proven emphasis on safety and training. Here are a few tips that should get you on your way.
Do More than is Required
So often we will hear business owners, or in some cases, the CFO or Safety/Risk Management Director, say, “We rely on our insurance carrier’s requirements.” This can apply to what constitutes an acceptable driver motor vehicle report (MVRs) or how often you should be conducting safety meetings and anything in between. While insurance carriers do have minimum guidelines they want their policy-holders to adhere to, they also want to do business with companies who are doing more than just the bare minimum. For example, if your company does not have their own criteria for what an acceptable MVR is, create one using the basic guidelines your carrier uses. Tailor them to suit your company and keep them realistic, but make them a bit more detailed than what the carrier has in place. This will not only help you bring in better drivers, but also should result in less accidents/claims. Yes, there is a shortage of good drivers out there, which is all the more reason to be selective in who you bring into your company. Someone with a suspect MVR could come in and be an excellent driver for six months, then have an accident that you are left to deal with for the foreseeable future—in the meantime, they have left and taken another job. Being selective with your driver hiring is the first step to protecting you premiums as well as your CAB Score.
Monitor Your SAFER Report
This goes by many names: Cab Report, SAFER Report, FMCSA Report, etc., but in reality they are all one in the same. Your SAFER Report is the first place an underwriter will go once they start digging into your file as they consider offering you terms of coverage. If you are not checking it for accuracy on a regular basis, then you should be. For example, when was the last time you updated your MCS-150 form? This is the form that indicates the number of power units you have, number of drivers and estimated miles to be driven. If this report has not been updated for several years and you have expanded your fleet from 10 power units to 30 power units, any violations you have received from DOT will give you a false average related to the industry. This can and will work against you when going through the renewal process. FMCSA recommends that you update this form at least once per year. However, we would recommend you updated it/review it at a minimum of every six months.
There are other reasons to monitor this report as well. Recently, we have seen several instances where a DOT citation is credited to a company, but it had nothing to do with them (we have seen a few that show a violation in a state where the company does not even have operations, but it is now on them to get this error fixed and removed from their record). Perhaps the agent got the DOT or MC number incorrect when entering it in. In any case, it can have an extremely negative impact if the citation counts towards your Out Of Service (OOS) score. If an underwriter sees your company is above the industry average (currently at 20.72 percent) they are going to ask a bunch of questions such as: What is being done to correct the OOS issues? What has the company done to hold managers and drivers accountable? Are they requiring drivers to complete Pre/ Post trip reports, and if so, who is responsible for making sure the issues have been corrected before that unit is put back into service? Etc. If you cannot provide them with good answers, you could be putting the opportunity to obtain affordable coverage at risk. Over the past 24 months, this tool has become one of the most important pieces of the underwriting process. Insurance carriers are able to go in and see the number of violations you have had over the past two years, how severe were the infractions, is it the same vehicle or driver being cited, etc. You can view your SAFER report by going to https://safer.fmcsa.dot.gov/ and entering in your info.
Distracted Driving
At the beginning of the article we mentioned the cost of auto insurance is not going down anytime soon. This is because of a few factors. Distracted driving continues to be a dominant factor in auto accidents. A report AT&T shared with the NWRA Safety Committee stated in 2008 distracted driving accounted for approximately 18 percent of all auto accidents. That number jumped to 67 percent in 2015! This one action more than tripled in an eight-year span. This coupled with the increased costs of vehicle technology, such as cameras, sensors, OEM parts, etc. means repair costs are way up; then there are the medical costs, which also continue to escalate year over year. The most common response from business owners is that it is not their drivers who are distracted and causing the accident. This may very well be true, which is why it is imperative that companies are training all their employees to have their head on a swivel. Whether it is driver helpers who are loading rear loads or folks directing traffic at the landfill or transfer station, the “other driver” needs to be monitored at all times. This is extremely difficult to do when your employees are trying to get their work done and move on to the next stop, but nevertheless needs to be ingrained into your people. One area both SWANA and the NWRA are making a push is in the Slow Down to Get Around legislation. Several states have recently added this to their laws and several others are considering it now.
Driver/Helper Communication
Every company should have a “basic” set of communication training done between drivers and helpers. For example, this could be a set of hand signals that show when the helper is off the riding step and in a safe place for the vehicle to move (see Figure 1). Accidents related to backing continue to plague the industry. It is important that the driver and helper know and use the same signals, which is why the term “basic” is used above. Just like any other team, a driver and helper are going to develop chemistry over time. They might even come up with their own way to communicate after working together for an extended period. If this is the case, fantastic. However, what happens when the driver is out sick one day and the helper needs to communicate with the replacement to ensure their safety and the safety of those in the operating area? Having some standard procedures on communicating is wise for all parties involved.
As a side note, it is also smart to have employees cross-trained. Recently, at a safety symposium in New York City, one of my fellow panelists stated how when he was a helper he learned as much about the truck as possible. This not only prepared him for the eventual progression from helper to driver, but also allowed him to recognize when the unit may not have been functioning properly. As the driver is in the front of the vehicle, he may not hear the thumping or clanking the helper hears at the rear of the unit. Being cross-trained to identify issues in the vehicle can help keep the employees safe during operation as well as keep the equipment in good operating condition.
Technology
This is a double-edged sword in many ways. Every day there is something new being implemented into the field. The easiest example of this would be in-cab camera technology. It has taken off and is now making its way to the private sector. Many retail outlets now have a system you can put in your personal vehicle if you so choose.
The hardest part of this technology (other than the cost) is getting drivers to understand that the cameras are there for their protection. Many drivers often feel their supervisors are now “spying” on them or looking for ways/reasons to write them up or possibly terminate their employment. If you are going to implement cameras into your company take the time to educate your drivers on why they are being installed. Provide a company-sponsored lunch or BBQ to do a Q&A on the devices. Show them examples of how these cameras have proven the innocence of a driver (the camera company will most likely have examples they can share or you can always try YouTube). Once the drivers understand this could save them in the event of an accident, they are often more accepting of the devices.
You should also let them know these devices can help on the insurance costs and if the claims are low, the company will have additional funds to invest in newer equipment, PPE or other items that will make their working conditions more comfortable and safer. Perhaps, some of the savings can be added to their end of year bonus. Once they understand these devices can and do protect them and their fellow employees, they are much more willing to accept them in the vehicle.
The downside of some technology is it adds in one more blinking light or audible alarm in the cab that could potentially distract the driver. Before you elect to go full bore on implementing something, do a trial run in a few of your vehicles and then ask for feedback from the drivers and others who have used it. Oftentimes, the product can look great on paper or in simulated environments, but when applied to its intended use there are issues that need to be accounted for. This could be something as easy as where to place the screen for the routing monitor to avoid glare from hitting the driver in the eye while operating the vehicle. Seek the actual users input on where in the cab the technology should go since they will be using it day in and day out.
Commitment to Pre- and Post-Trip Reports
Think of the most recent DOT violations you received. Odds are, they could have easily been prevented had a proper pre- and post-trip report been done on the unit at the end of a prior day’s shift and again before the truck left the yard. There is no question things are going to happen during the day while the vehicle is operating. Bulbs will burn out, wires will jostle loose and brakes may start squeaking. However, there is no excuse for a truck to ever leave the yard with known issues that pose a safety hazard to your employees and the general public.
Having a solid pre- and post-trip checklist is crucial to this process. Your fleet may include several different types of units. There is no reason each type cannot have its own checklist where it makes sense, or different sections on the same form identified by unit type (Front Load, Rear Load, Roll-Off etc.). Implementing and being consistent in this area could save your company thousands of dollars annually in violations as well as maintenance costs. If you can catch an issue when it first happens, the ability to mitigate potential damage to the equipment is drastically higher. It will also go a long way when the underwriters review your SAFER report and do not see any major violations. If they log in and see you have several violations for a tire tread depth of less than 2/32”, they are going to be extremely wary of your internal pre/post-trip reporting system as well as offering you terms. Something like this is considered a major violation and frankly is one that would be caught if the inspections were being done properly day in and day out.
Employee Pay: Day Rate Versus Hourly
Many companies like to pay their employees a flat rate for the day. Conceptually this is great, but it often falls short in application. For example, if you pay your employees a day rate, the driver and helper are going to make the same amount of money if the job takes four hours or seven hours. If they finish in four hours they now have extra time in their day to do other things, or possibly work a second job. Because of this, teams often cut corners, particularly related to safety to wrap up their shift.
Insurance carriers are well aware of this and it is one of the reasons most, if not all, ask how you compensate your employees. They would prefer to see drivers and helpers paid by the hour. The insurance carriers who still write waste-related companies have ample data to fall back on that shows that the day rate method produces more injuries and accidents than the hourly pay method. Clearly you need to do what is right for your company, but when it comes to insurance, day rates are less than desirable for carriers.
Starting at the Top
All of these items are suggestions we consistently make to our clients. They are also just the tip of the iceberg. Keep in mind, it is up to you, your safety professional and employees to create and maintain a safe working environment. This process starts at the top, and the employees are always watching. If the company owner or safety director does a safety briefing about not using hand held devices for everyone and later this same person is seen driving and using their device, the credibility of the briefing is now shot as the story will most certainly make its way through the company.
There is no magic wand to wave that will come in and cut insurance premiums in half, but by constantly preaching safety, then taking the necessary steps to back up what is being said, you can and will change the culture of the company. Parents are constantly telling their children, “Anything worth doing is often hard work and takes time.” Implementing and maintaining a proper safety culture is no different, and once it is in place and operational, you will not only have a safer and more productive working environment for you employees, but you will also truly have taken steps to set your company apart from your competition.
Nathan Brainard, AAI, is Vice President of the Environmental Division at Insurance Office of America (IOA) (Longwood, FL) and is the endorsed insurance partner of the NWRA. Nathan has been with IOA for 12 years and specializes in Environmental Insurance with an emphasis on the Waste, Recycling, Remediation and Demolition industries. He can be reached at (407) 998-5287 or via e-mail at [email protected].