For the purposes of this article, the focus will be on transportation companies and their auto liability insurance carrier. So, what exactly is loss control? Simply put, it is the controls you have in place to ensure DOT compliance and safety. Your insurance carrier wants to ensure that the company has sufficient controls in place to limit losses that can affect them paying claims.
Your insurance carrier may conduct a loss control visit either in person or over the telephone.
This is a requirement of the policy conditions of your auto liability insurance and those policy conditions can have similar language noted in Figure 1.
Failure to comply with completing a loss control visit may result in cancellation of your insurance policy.
These types of meetings usually occur right after a policy has been bound, or near a renewal date of the policy. The insurance company uses loss control agents, many of which are third party consultants, to conduct these meetings; they are “the eyes and ears” of the underwriter for your insurance policy. The main objective of these loss control meetings is to determine how well a company understands DOT compliance and the quality of their safety program. The agent’s primary focus is to determine if your company is a good risk or a bad risk. Recommendations are made at the end of a loss control meeting and should be given serious consideration by the company to improve its safety program.
So, what does a loss control agent do during the meeting?
The agents’ main foci are DOT compliance and the elements of your safety program. They should start the meeting with questions about the operation. What type of operation is the company? Is it a passenger operation, paratransit operation, dry van operation, flatbed operation, intermodal operation, or some other type of operation? How long have they been in business? How many drivers and power units do they have? Are they subject to USDOT regulations? What is the radius of their operation? Do they transport hazardous materials? Has the company had a DOT compliance review? If so, what was the rating?
The next area they examine is a company’s BASIC scores. Loss control agents review the violations for each section in Figure 2. They may ask specific questions about violations a company has received in the last 24-months, and will also analyze trends. For example, does a company have a lot of hours of service violations? If so, what are the causes and what is the company doing to reduce the frequency of those violations?
Insurance company underwriters also look at these scores and violations. They, too, are trying to figure out if the company has a problem and whether or not they want to insure the company.
It is important for companies to keep their MCS-150 report updated and to use Data-Q challenges to maintain accurate information in the sections above. To verify issues involving the BASICs, the loss control agent will review driver qualification files, maintenance files, the drug/alcohol program, and electronic logging reports. They may ask to meet dispatchers, managers, and maintenance personnel as well as inspect vehicles and take pictures.
Other areas the loss control agent will look at are the company’s safety and training programs. Specifically, are these programs structured and documented? They will ask to see copies of company safety policies, disciplinary policies, procedures, quizzes, memos, safety meeting agendas, and other documentation that verify the training and safety programs. It is best to provide them with copies of these items so they can prove to the underwriter that the programs are structured and documented. Remember, the underwriter is trying to determine if a company is a good risk.
Preparing for a loss control meeting should not cause you to go into panic mode. This is an opportunity to show the insurance company that your operation is a good risk and that you take compliance and safety seriously! Here is a checklist to help you prepare: Link
Don’t forget to notify your insurance agent of any loss control meetings. He/she may want to attend the meeting and/or provide assistance for the meeting. Verify that the person claiming to complete the loss control meeting is working for your insurance company. You can request that the individual provide you with the insurance policy number and then ask your agent to verify him/her.