If you are one of the lucky companies who has not had a lot of claims over the past several years, or you are working on getting your act cleaned up, there are a few things you should be doing to help deflect potential increases in your insurance.
By Nathan Brainard
During the slow transition into summer, many employees and business owners gear up for vacations, family reunions and projects around the house. This time of year is often filled with travel and dealings outside of the business world. It is a time to be enjoyed and celebrated. It also poses a safety issue.
- Kids are out of school and are often out early in the mornings and into the early evening hours; the weather changes to warmer temperatures, which pose a new risk to employees exposed to the elements and attention to detail slips a bit. The focus that normally exists at work is not quite as sharp as people tend to look ahead to the trips and events they have planned. It is looking forward to these events that can create mental gaffes on the job. The Federal Motor Carrier Safety Administration (FMCSA) saw the following changes from 2014 to 2016:
- 37,461 lives lost on America’s Roadways in 34,439 fatal motor vehicle crashes
- 4,564 lives were lost in 4,079 crashes involving large trucks or buses; fatalities increased 5 percent from 2015, and fatal crashes increased 6 percent
- Large truck occupants comprised 16 percent of all large truck and bus fatalities, a 4 percent increase from 2015
- Large trucks and buses account for 12 percent of all fatal accidents1
During this same period, the 10 states with the highest average of fatal large truck and bus crashes were New York, Pennsylvania, Ohio, Indiana, Illinois, California, North Carolina, Georgia, Florida and Texas. These 10 states represented the following:
- At least 39 percent of large truck occupants killed were not wearing a seat belt
- Speed was a factor in 17 percent of truck crashes with at least one large truck occupant fatality
- 61 percent of fatal crashes involving a large truck occurred in rural areas
- 27 percent of fatal crashes in work zones involved a large truck
- 6 percent involved large truck driver distraction as a factor, of which 16 percent was related to cell phone use.2
While your company may not be located or operating in one of these states, the risks your drivers and employees face are quite similar and as the employer the responsibility falls on you to help them stay focused while operating a vehicle or being in and around machinery during their workday.
The current environment for auto liability insurance is at an all-time high. Insurance carriers are not making any money on this line of coverage regardless of industry, geographic location or vehicle type. This is causing rates to increase year over year and unfortunately there does not appear to be any end in sight. Even companies who have not had any claims are seeing their rates increase. We are aware of one carrier who is seeking an average premium increase of 30 percent across the board regardless of your specific losses because they have taken such a beating. This is not uncommon in the current auto insurance environment. We have more cars on the road using more expensive technology (cameras, sensors etc.) and more uninsured/underinsured drivers on the road. This all leads to more claims being paid at a higher per claim average than in years past. Simply put, the auto carriers are saying they cannot get enough premium to cover their exposure and as such premium increases are being passed on to the consumer. As no one wants to pay a single cent more than they have to on their insurance program, it is up to you to take control of your program and work to mitigate any potential increases.
Regardless if you are one of the lucky companies who has not had a lot of claims over the past four years, or you are working on getting your act cleaned up, there are a few things you should be doing this summer to help mitigate any potential increases at your next renewal.
SAFER and Training
Check on your SAFER score (https://safer.fmcsa.dot.gov/). This cannot be over emphasized. This is the very first place underwriters are going to research your company. This provides them with forward looking optics on where your claims will most likely come from, what types of controls you have in place for vehicle maintenance, whether or not you are you having a lot of Out of Service (OOS) issues, driver related issues, etc. For example, if you are receiving citations or violations for Out of Service, the underwriter will look to see if they are serious violations involving brakes, tire tread depth, load securement, driving while using a handheld device, etc. These types of violations can literally kill your opportunity with an underwriter if your overall score is above industry average. Make sure you review your pre/post trip processes and amend protocols as necessary. Put together a committee to review what is currently in place; it should include someone from maintenance, a group of drivers (very important if you are running several different body types in your fleet) and anyone else who can provide valuable insight. More often than not, companies come up with operating procedures that look great on paper, but are impractical to execute in the field. By involving the people you expect to implement the procedures, you are showing that you value their opinion and will get an end product that will actually be able to be applied in the field. Once you have their feedback in writing and you have implemented it, make sure you tell your insurance agent, so they can use that in your favor when marketing the renewal.
While you are on their Web site, make sure your MCS-150 is up to date and accurate. This is the report you submit showing how many power units are in your fleet, how many drivers you have and approximately how many miles you will drive this year. If this data is incorrect, it can skew your OOS rating and paint you in a poor light to underwriters. For example, if the MCS-150 on file shows you have 20 power units, but in reality, you have 35, you are shorting yourself and the actual spread of your risk should look better.
Use the report for training. It will tell you whether or not drivers are doing their pre/post trip reports. This can be extremely useful to companies who assign a specific vehicle to a driver since the report will indicate the VIN number of the unit inspected. Repeat offenders can be easily identified. While it is entirely possible for lights to come loose during the course of the day given the environment our trucks work in, it is not practical to believe nine different lights on the same truck all came loose at the same time. Identify those drivers who are clearly just going through the motions and provide additional training. There are many different data points this report will provide to you. Take advantage of the summer months to get ahead of your next claim by training it out of existence.
Summer time also brings nicer weather. Try changing the location of your safety meetings from inside to outside. Switching the venue will create a subtle change, but one you can use to capture the attention of your employees. Anything you can do to change up the delivery method without it being a distraction is always highly encouraged. Things such as guest presenters from industry trade associations or DOT consultants, moving the meeting to a new location or using materials provided by your carrier can help keep the attention of the drivers much more so than having them go through the same old process over and over again.
You should also be addressing the change in temperature. Warmer weather brings about a different set of issues to deal with such as dehydration and heat illnesses. Conduct a review of the warning signs employees should be on the lookout for so issues can be identified and addressed in the early stages. It seems remedial, but these incidents happen every single day in companies both large and small.
Most insurance carriers offering coverage to the waste and recycling industry have industry specific safety materials they can provide to you at no cost. Many of them offer it in both printed and electronic format, either of which can be used in a classroom training environment.
Start a Wellness Initiative
Employee health issues are on the rise. From the amount of time we spend in sedentary positions, such as behind a desk or in a seat driving, we simply are not getting the amount of physical activity we need to stay healthy. This is driving premiums on employer sponsored health insurance plans. Here are five key reasons/plans to institute a wellness initiative:
- Employers are beginning to embrace the notion that wellness and safety go together in a human capital management strategy. Using toolbox talks and other safety meetings to discuss wellness can spread the word effectively.
- The data supports the fact that poor health increases severity and frequency of workers comp risk
- Better health improves employee morale and engagement and according to a Gallup Study. Workers who are engaged are 202 percent more productive then non-engaged employees.
- Most medical carriers have wellness embedded in the premium cost already, so it normally will not show up as an additional line item.
- Getting your employees to run the wellness plan by forming a wellness committee helps spread the workload and engages the employees in developing the plan they want.
There are also desk systems out there such as Varidesk (www.varidesk), which permit employees to adjust the height of their workstation to a standing position. While this is a small thing, it can really help with back issues as well as simply getting the blood flowing, and as previously stated, employees who feel good while at work will have more positive interactions with your customers. If you do go this route, do not forget to also invest in a good footpad. You do not want your employees to not use the standing desk you invested in because of foot fatigue/pain. Many products are available to solve this issue as well as identify which type of mat will be best for your work environment, such as https://notsitting.com/standing-desk-mat/. However, what about employees who are not seated behind a desk all day?
Many carriers will offer premium discounts if you institute a wellness program and most, if not all of the carriers, will help you design and implement a program for your team taking into account their work environment. Employees who feel better will have a better attitude. Some companies even use this opportunity as a team building event designing group weight loss challenges, creating walking/running/biking groups, etc. Some of our clients have even been successful in negotiating a discount for their employees at a local gym. Not only will this help them get into better shape, but it is also helpful to their pocketbook, which they will always appreciate.
This time of year allows for all kinds of options as the weather is often the best it will be in the calendar cycle. Take advantage as it will be over before you know it. If properly implemented, the employees will embrace it and everyone will reap the benefit of lower health insurance costs while at the same time feeling physically better.
Experiment with Technology
The technology available in today’s world is staggering. Even from where we are today versus just five years ago is remarkable. While it is not always cheap, technology is here to stay and has a proven positive impact when implemented. Most providers of in-cab camera systems offer some type of “testing or pilot program” for prospective buyers. If this is something you are considering, research the various companies who offer the type of product and figure out who has the one best suited for your company and run a trial program. See if it is worth the investment for the rest of the fleet. Reach out to your agent—many insurance companies now have affinity programs with one or more providers of camera systems, which often come with a discounted rate for policy holders. If you do end up installing a system, be sure to track your progress (your agent should really be doing this for you) so you can demonstrate how the implementation has helped the company get better and this should warrant premium considerations as annual loss ratios decline. As a disclaimer, no insurance carrier is going to give you a discount upfront for installing cameras. The “savings” will come over time as the cameras generate data, which can get you out of a claim all together.
Use Your Home Turf Advantage
Schedule a meeting with your agent and the underwriter/carrier representative. Have them come to your shop and meet with you in person so that you can talk through expectations for the rest of the term as well as with the renewal. While they may not be able to give you specifics on your renewal (this will depend on how far into your policy term you are), they can tell you what their losses look like as well as any corporate guidelines they are hearing related to premium increases, exiting the market/class of business, etc. This will allow you to properly prepare for your renewal and not be caught off guard by what the marketplace has to offer.
This is also a great time for them to hear from you on all of the things you are doing to make your company better than your competition. It is also a good time to walk them around your yard to see your housekeeping and the overall environment you provide to your employees on a daily basis. They will be interested to see how clean, neat and organized your facility is, but they will also use the opportunity to gauge employee morale, see if they are wearing the proper personal protective equipment, find out if machine guards are properly in place, etc. No one will ever tell your story better than you, so use an in-person visit to show why you deserve better treatment than your competitors.
Employee Appreciation Events
Employee appreciation events are undervalued. The old adage is, “happy employees create happy customer experiences.” Break out the grill over a weekend or a time when you would otherwise be closed and treat your employees to an afternoon where ownership and senior management cook and serve the employees and their families. Yes, there is a cost to this, however, the potential return on the investment is invaluable. It is about the experience you are providing to your employees and showing them how much you value them. A quick Google search yielded many options to hold relatively inexpensive employee appreciation events. A few ideas are:
• www.zoomshift.com/blog/employee-appreciation-day-ideas
• https://justworks.com/blog/master-employee-appreciation-inexpensive-ideas
• www.baudville.com/resourcecenter2/article.aspx?id=514
• www.tinypulse.com/blog/sk-18-creative-employee-recognition-ideas
There can be unexpected outcomes from these events, such as finding out something is going on in a department in which you had no idea was occurring. Even if this does not happen, you are showing your employees that you care, and that can make a world of difference the next time Mrs. Smith comes running down the driveway to catch the truck as it is already starting to pass her house.
Everyone needs to feel appreciated in their job and they also want their families to see and meet their friends from work. It allows them to take pride in the company they work for and show off a bit for their families. You can accomplish all of this in one broad stroke and it only costs you a few bucks and a couple of hours over the weekend.
Remaining Focused
These are just a few ideas on what you can do to keep your employees focused and engaged, so the opportunity for mental errors are kept in check. Accidents can and will happen, but they can be reduced if your employees remain focused while at work instead of dreaming about their upcoming vacation.
Consider this your time to ramp up and mitigate any premium increases coming at the next renewal. Many companies renew in the first and second quarters. If you squander the time you have now, when it comes time to renew and you get a double-digit increase, you will regret it. Think of it as “spring cleaning” for your business, you are just doing it through the summer.
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 insurance for the Waste, Recycling, Remediation and Demolition industries. He can be reached at (407) 998-5287 or via e-mail at [email protected].
Notes
1. www.fmcsa.dot.gov/sites/fmcsa.dot.gov/files/docs/safety/data-and-statistics/84856/cmvtrafficsafetyfactsheet2016-2017.pdf. Source: Fatality Analysis Reporting System (FARS) and Federal Highway Administration, Highway Statistics 2016 data. Note: FARS data includes 10,000 to 14,000 lbs. trucks. Though these vehicles are categorized as large trucks, they are not necessarily used for commercial purposes. Personal vehicles not used for commercial purpose, though categorized as large are not regulated by FMCSA.
2. Large Truck Fatal Crash Data 2016.