Insurance Agents and the Safety Game

If you are an insurance agent and you try to secure coverage for a transportation company, then you have to provide potential insurance companies proof that your client has some type of safety program. The application process usually has some questions about the type of safety program the company has and who is in charge of the safety program.

So, here’s the game. The insurance agent asks their client if they have a safety program and the client tells the insurance agent, “Sure! We have a program.” The agent fills in the application that the client has a safety program and it is submitted to insurance companies seeking coverage.

That use to cut it for many insurance agents, but it doesn’t cut it anymore. The underwriters at insurance companies are looking for “A” accounts, the accounts that have low accident frequency rates, great CSA SMS BASIC scores with the FMCSA, and a great structured and documented safety program. These same underwriters are ordering pre-quote loss control visits and loss control visits right after coverage is bound to determine if they want stay on the risk. Those underwriters are rewarding those good companies with lower insurance premiums.

Safety First

So, insurance agents need to verify that the client does have a structured and documented safety program. That includes any written policies/procedures, safety training of management, safety training of drivers, documentation of safety meetings, and show the company is proactive with their safety program.

Many transportation companies “create” a safety program and then they forget it. That doesn’t cut it either. If the transportation company has an uptick of accidents, how are they being proactive to reduce future accidents? If they have an increased number of violations with the DOT, are they actively trying to reduce future violations?

If you are an insurance agent that has transportation company clients, then it is up to you to make sure your client has a structured and documented safety program to present to an insurance underwriter. You also have to work with your clients on reducing accident frequency rates and violations. In essence, you have to turn your “C” clients into “B” clients and your “B” clients into “A” clients.

Sample Certificate of Completion

Transportation companies are looking to their insurance agents to find the best insurance premium rates, but to get the best rates they need to be an “A” client. It’s one thing to say a transportation company has a safety program and its another to prove to an insurance company they have a safety program. If you’re an insurance agent, do yourself and your transportation clients a favor and refer them to a safety program that provides a verifiable certificate of completion that an insurance underwriter can see the transportation company completed.

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What is Loss Control?

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.

Avoid Fines: Update Your MCS-150 Report

One of the costly mistakes a transportation company can make is not updating its Motor Carrier Identification Report (MCS-150 Report). This report must be updated every 24-months; failure to do so can lead to a fine up to $10,000 and your company being shut down by the FMCSA.

Focus on Company Snapshot

Some transportation companies’ safety and training programs are complicated and difficult to navigate. However, these programs should be straightforward, easy to understand, and documented. Company employees should focus on the areas that their automobile liability insurance company and the Department of Transportation (DOT) regularly focus on – BASIC scores, MCS-150 data, accidents, and safety rating.

Driver Incentives—A Different Approach

Safety and compliance programs should contain a driver incentive program. Although companies may have some variation of an incentive program, many are not as effective at improving safety outcomes as they could be. At Transport Safely, we have developed a driver incentive program that is focused on improving CSA SMS BASIC scores and accidents, both core elements that insurance companies monitor to determine if your operation has an effective safety program.