Protecting Your Business is Serious Business

Work Related Accidents Impact…

  • You and your net worth
  • Your time and focus
  • The company you have built and its Stakeholders
  • Employees and their families
  • Lease Operators and their families

Risk Management is Mission Critical

  • What happens if an employee sustains a work-related injury or worse?
  • What happens if a lease operator sustains a work related injury or worse?
  • How is your exposure as a business owner different in each scenario?

Lease Operator

The Exposure…
The reality of occupational accident exposure is that if Lease Operators do not have coverage, then a serious injury will result in a claim made to the Motor Carrier’s workers compensation policy. Successful or not, you can count on the claim being made.

The Facts…
Occupational accidents and injuries can have devastating effects on an organization without proper protection.  If there’s enough money involved, personal injury lawyers will challenge the financial responsibility of all involved parties.  The related legal defense costs alone can severely impact operating profits and even drive many businesses into bankruptcy.  The coverage to reduce the exposure is both prudent and affordable.

What are the options?

Option #1:
Leave everyone exposed to a “parade of horribles.”

Option #2:
Agree that your lease operators are statutory employees and enroll them in your workers comp plan. This is the most expensive solution and may cause you to absorb the full onslaught of accompanying payroll taxes (perhaps even retroactively).

Option #3:
A Group Occupational Accident Plan for your lease operators allows you to pass through the related costs to them at a group rate, protecting them with 24/7, 48-state coverage, including survivor benefits, and defends your independent contractor agreement with them. Moreover, if you lose in a challenge by a court of law or workers comp review board, the Occupational Accident policy for the injured lease operator can be designed to convert to a ‘full blown’ workers comp policy and eliminate your company’s related contingent exposure.

Key GAIC Advantages for Lease Operators

  • Coverage limit issues, i.e., Plan A, B, C, or D;
  • Commencement Period
  1. GAIC gives 90 days to report a claim, treatment can begin when necessary
  2. Competing policies say treatment must begin in 90 days
  • Sub-limits: e.g., most competitors have $ 1,000 max limits for chiropractic care, ambulance or air flight, physical therapy, & other rehab treatment GAIC does not impose the sub-limit Accidents must be reported within 90 days, benefits can begin immediately upon reporting or at any time thereafter, and are not subject to a 90 day commencement period…and Accident benefits include dental where most competitors do not
  • When a $ 2mm CSL per occurrence aggregate for any one accident is selected, $ 1mm is set aside specifically for medical expenses, & $ 1mm for death, disability, & rehabilitation.
  • GAIC assigns a Nurse Care Manager to help insured deal w/ Psycho-Social issues
  • Temporary and Long-Term Disability Income benefit is based on Schedule C income and retro to day 1 (most competitors impose a 7 day grace period) and applies to the definition of “Under the course of doing business,” which includes maintenance, cleaning, & other misc activities…so coverage is not limited to just driving and loading/unloading
  • The $ 1mm maximum accident medical benefit is annual, not a lifetime one
  • Death benefits apply if death occurs within 2 years (instead of just 52 weeks) from the accident

Important Coverage Points for Fleets

  • Major point:  to keep personal injury attorneys away and adverse decisions from workers comp review boards, fleets need to offer the most broad occupational accident coverage available
  • GAIC does not impose Aggregate Limits on the Group Policy as do competitors…if a fleet has 100 drivers, each with $ 2mm Aggregate Limit, then GAIC’s exposure is $200mm.  A competitor will attempt to sell the same deal but put a $ 5mm or $ 10mm aggregate “stop loss” limit in
  • Average length of disability with GAIC is 29 days, which is 9 to 14 days shorter than before the Nurse Care Manager benefit was introduced.
  • Any expense not covered is a potential black hole liability
  • GAIC’s policy limits are generally higher than competitors
  1. Accidental death benefit pays $ 50K more ($ 300K vs $ 250K), i.e., the $ 2000/month survivor benefit pays for 125 months instead of just 100 months
  2. Accidental Dismemberment pays $50K more ($ 300K vs $ 250K)
  3. Paralysis benefit pays $50K more ($ 300K vs $ 250K)
  • Contingent Liability Feature available to the Motor Carrier as part of the Occupational Accident plan…it defends the lease agreement if a lease operator accident claimant attempts to claim employee status & collect workers comp benefits…and it defends the company in a Court of Law or in a Workers Compensation Review Board…if you lose, the contingent liability feature will pay up to statutory limits of a Workers Comp Policy

Need more information or help? Western Truck Insurance can answer all of your risk questions and help protect you and your business.

WHAT IS STATED AMOUNT PHYSICAL DAMAGE?

Unlike private passenger type vehicles commercial trucking physical damage is often insured on a “stated amount” basis.

Physical damage premiums for private passenger type vehicles are ordinarily determined based on the original cost of the vehicle and its age.  This is practical largely because these vehicles depreciate in an easily predicted fashion.  Heavy commercial vehicles, however, are designed to outlast their engines.  Truck tractors, often traveling well in excess of 100,000 miles per year are designed to have their engines replaced regularly.  The value of the vehicle therefore is heavily dependent upon how recently the engine has been replaced.  A four year old tractor, for example, with a new engine, is worth considerably more than a similar four year old tractor with similar mileage and with its original engine.

Since it is more difficult to determine the worth of heavy commercial vehicles based on original cost and age, truck insurers have developed an alternative method, “Stated Amount” for providing physical damage coverage and determining premium.  The insured “states” the maximum vale of the vehicle and the premium is determined as a percentage of that value.  That percentage decreases as the deductible increases. 

In general lower valued vehicles pay a higher premium percentage than more valuable vehicles because damage that would be a partial loss on a high valued vehicle could be a total loss on an older, lower valued vehicle.

The insured does not automatically receive the stated amount in the event of a loss.  The amount paid is always the least of three possible values:

  • The actual cash value of the vehicle at the time of the loss
  • The cost of repairing or replacing the vehicle with one of like kind and quality
  • The stated amount of insurance for the vehicle

Therefore the most that the insured could collect in the event of a total loss would be the stated amount. 

On a stated amount basis truckers must value their vehicles in advance.  At each renewal the values must be reevaluated.  Automatic coverage is made more complex because of the need for timely vehicle valuations.  Professional underwriters will require insureds to justify in advance valuations that differ significantly from average expectations.  A little time spent resolving these issues when the vehicle is initially insured can avoid serious claims settlement problems following losses.

Truck insureds and truck claims adjusters, however, both favor the stated amount approach.  They like the idea of having an automatic cap on the value of the vehicle.  It makes claims settlement negotiations less contentious.  It is also easier and more accurate to compare competitive quotes on a percentage of value basis.

WHAT IS PHYSICAL DAMAGE INSURANCE?

Operators of commercial vehicles, such as truckers, need a number of insurance products.

Automobile Physical Damage insurance covers the damage to, disappearance, or destruction of actual automobiles and/or their equipment, such as tractors, trailers or semitrailers, trucks, or private passenger types of vehicles.  Equipment does not include personal effects (clothes, eyeglasses, etc.)

Covered autos are determined by designation symbols that must be tailored to whether the automobile that is to be insured is owned, rented, leased, hired, or borrowed and the type of vehicle.  Premiums usually depend upon the type and age of the vehicle, coverages chosen, garaging location, driver information, deductibles chosen, and loss experience

Such coverage is divided into two major components “collision” and “all perils other than collision.”   Collision covers striking another object (including other vehicles) and overturn of the vehicle.

“All perils other than collision” include loss by fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief, vandalism, falling objects, or the sinking, burning, collision or derailment of any conveyance transporting the auto.  These coverages can be purchased on an all inclusive or comprehensive basis, or a basis where each peril is specifically described (called named peril or limited specified causes of loss.)  In both cases there are some perils which are excluded from coverage.

Excluded perils for which no physical damage insurance coverage is ordinarily provided include nuclear hazards, war or military actions, organized racing or demolition contests, wear and tear, road damage to tires, and damage to most electronic equipment not required for the operation of the vehicle.

Although not mandated by law, like automobile liability insurance, physical damage is ordinarily required by financial institutions that loan money to purchase automobiles.  Since the automobile is used as collateral for the loan, the lender needs to make sure that the collateral remains unimpaired.  The insured’s own equity in his or her vehicle is also protected.

There are ordinarily separate deductibles for the “collision” and “other than collision” coverages.  Deductibles are the portion the insured must pay in the event of a loss.

The amount of coverage is ordinarily limited to the cost of repairing or replacing the damaged or stolen property or its value less depreciation.  If an insurer pays a physical damage claim that is the fault of someone else then the insurance company upon paying the physical damage claim assumes the right to recover the cost from whoever caused the claim.

Truck Accident Claims Reporting and Handling

It seems that one of the more consistent areas of needed improvement for truckers, whether large fleet, small fleet or owner operators, is in the approach to claims reporting. This writer, who actively receives claims, has seen the gambit in claims reporting from well documented detail to virtually no information provided at all.

So what’s the big deal?  Why collect any information at all, especially if there will be a police report available anyway? The answer to these questions is not always obvious to the truck driver who is feeling threatened by the consequences, regardless of whether the accident was the driver’s fault.

Approximately 30% of truck accidents are never reported by truck drivers. Most of those “non-reports” are not-at-fault accidents and the drivers just “presume” the other party will take care of their own damages. Many, however, are the result of a driver either embarrassed about the incident or hopeful it will just disappear. Finally, quite a number of these non reported accidents are the result of the driver just not knowing what to do.

Accident reporting is simple. Just about every insurance company and/or agent provides an accident report form directly to the motor carrier or driver. That form is the basis for collecting information about the accident and all drivers should carry that form in their truck. It is the responsibility of fleet safety personnel to make sure the form is in all trucks and that drivers are continuously trained on how to complete it.

At the time of any collision, fire, theft, or other loss, the driver should take a deep breath and go into, what I call, “the data collection mode”. This should be a non-emotional, fact gathering, state of mind. There should be no admitting or blaming for wrong doing with other parties. The driver should immediately grab the accident report form and begin asking questions and documenting information.

The first, and most obvious, is to assess whether anyone is hurt including the other driver and anyone else involved. Assuming the other driver has not been hurt and can actively participate in obtaining details, he/she should get themselves, all other parties, and the vehicles out of harm’s way if at all possible.

Once safely out of danger, the driver should note the date, time, and specific location of the occurrence on the report form. Also write down the description of the other vehicles involved, license plate numbers, and note how many people were in other vehicles.  Again, document this information on the report form. Before the police arrive, the driver should courteously approach the other parties and invite them to assist by exchanging contact information including name, address, phone numbers, email addresses, and insurance information.   No discussion of who was at fault should occur as that only leads to everyone becoming defensive and uncooperative. If the driver has a camera, or phone equipped with one, it is advisable to take pictures of everything.

After exchanging information, the driver should clearly write out an honest description of what occurred along with a graphic diagram of the incident. Doing so will help everyone visually understand the nature of the verbal and written details. Once this has been completed, the fleet safety manager (if applicable), a representative from the insurance company, and/or the insurance agent should be contacted.

Generally, the biggest stumbling block we run into is with the driver not moving quickly to obtain the above information, and then when police arrive and separate the parties, it’s too late for the driver to obtain the much needed information.

Claims that are reported immediately and with complete information are almost always settled at a lower cost than those that are not reported quickly and with detail. All drivers should make sure they carry the claim report form in their vehicles at all times.    

Truck Insurance Agent/Broker Selection Criteria

It has been determined that one of the most difficult things a buyer of truck insurance goes through is how to qualify the insurance broker.   All brokers are not alike and, especially with commercial truck insurance,  the differences can be staggering. 

So what’s a buyer to do ??

It has come to our attention that a recent independent study was done to address this issue.   In that study many areas are covered that deal with learning how to obtain the perfect coverage and pointing out some of the problems with insurance coverage in general but the best takeaway from it certainly is the detailed list of capabilities that a qualified commercial truck insurance broker should be able to do.

This listing solves the problem and all you need to do is inquire from the broker who you may already be using, or plan to use,  if they 1) understand the capabilties you are asking and 2) do actually perform those items.

Check out this link to see the preview of the full study and request it for free.  There is no charge for this vital information which will make your job in qualifying an insurance agent or broker much easier.  Goto:   http://truckinsure.com/slideshow2.html

Catering Truck Insurance

What to Know About Catering Truck Insurance

Food trucks have grown in popularity in recent years. Many consumers appreciate the fact tasty food can be delivered to their home or business. If you operate this kind of vehicle, then it is vital to get it insured. It needs to be insured no matter what because it is a vehicle, but if you sell food, then you need to obtain a specialized catering truck insurance policy. When pursuing this, it is vital to keep several points in mind to get the best coverage out there.

Buy From an Experienced Food Truck Insurance Agent

Since food is being sold from the truck, different types of policies are required. That means an operator of a catering truck needs more than simply a standard auto insurance policy. For this reason, it is good to work with an agent who has dealt with catering trucks in the past. Someone who has never done this before may be willing to take on the job but does not understand everything that needs to go into the policy. Experience matters in the insurance world.

Get Every Policy You Need

Owning a company vehicle usually requires the owner, whether it is an individual or company, to have commercial auto insurance. A catering truck requires much more than that, such as:

  • Auto Liability Insurance: Vehicle insurance should cover damage caused by collisions and damage caused by fire or other natural disasters. It is also good to acquire uninsured coverage in case you end up in an accident with someone else lacking insurance.
  • Commercial Property (Equipment) Insurance: This covers additional property you own outside of the truck. That includes kitchen equipment and any computers you need to operate the day-to-day actions.
  • Commercial General Liability Insurance: This insurance protects you in case of property damage or injuries you cause in your food services business.. If the food from your truck makes someone sick, then  commercial  general  liability coverage protects you. 
  • Workers’ Compensation Insurance: Various employees need to work on a catering truck including the driver and  the cooks in the back. You need to ensure employees injured in a vehicle collision or from getting hurt in the kitchen have safeguards in place.

Catering truck insurance technically consists of several different coverages, and they are all essential. Professional brokers will assist you in finding a policy that covers everything you need, so you can operate your business with peace of mind.

Truck Insurance Sales People Needed

A quick tally on the pulse of the insurance professionals who specialize in placing insurance for the trucking industry reveals a strong need for quality sales people.

A regional business development manager from Great American Insurance Company recently stated that the brokers he works with are all looking for new producers, or sales people.  

This is an interesting development as this form of insurance sales is a great place to be working in; as far as insurance sales go.   The cost of truck insurance is relatively expensive and the commissions can add up fast as compared to personal auto or homeowners insurance sales.    The sales person needs to understand the trucking industry,  commercial trucks,  and the appropriate insurance coverage needed but this is relatively simple and can be learned in depth within 6 months.

Good sales people,  especially those already in insurance, should hunt down the high quality brokers who specialize in this line of insurance.   Take a look at this commercial truck insurance sales ad.