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Commentary: Make the insurance loss control visit work for your business

Nuclear verdicts and social inflation may mean greater scrutiny during loss control visits for fleet operators. Understand the goals and purpose of the loss control visit and how to prepare for it. (Photo: Jim Allen/FreightWaves)

The views expressed here are solely those of the author and do not necessarily represent the views of FreightWaves or its affiliates.     

Before issuing a quote or after a new policy is purchased, insurance companies will often send a loss control expert to visit fleet operators. The goal of the visit is to understand and assess the business’ operations and processes and pinpoint any hazards that might increase the risk of a future claim.

After the visit, the underwriter will make recommendations of how the fleet operator can further improve operations, with the ultimate goal of reducing losses.

What most fleet operators don’t realize is that underwriters aren’t looking for perfection during their loss control visit. Instead, they’re looking for operators committed to improving safety and operations over time that they can partner with in those efforts.

Proactive fleet operators will want to use the loss control visit as a chance for the operator’s risk manager to engage the insurance representative and benefit from their knowledge. The loss control expert will have a unique perspective and knowledge of like businesses. They’ll know how other companies handle things, what incentive programs worked for them and more. It’s easy to make the loss control visit work to your business’ benefit as well.

Preparing for the loss control visit

The loss control expert will want to know about the following aspects of your operation during their visit. Use this checklist to prepare.

  • Review of operations. Carriers will want to know what you’re hauling, where loads are going, if drivers are coming home nightly and the average and maximum length of haul. Review these details from your policy application to ensure a consistent message. Consider what other questions may be asked specific to your operations and prepare to frame them in the right context.
  • Loss analysis. The carrier will want to know if your business is analyzing loss data to identify trends and take necessary actions to mitigate future losses. For many fleet operators, this is a chance to show the carrier what you do well. For example, if your fleet has experienced a number of fender benders at a single intersection, and you changed routes to avoid that intersection, tell the carrier. Understanding loss trends, maintaining an updated register of loss details, including location of loss, time of day, weather conditions, driver involved, etc., will help you analyze the trends.
  • Driver hiring. The insurance representative will want to know about your hiring practices. How many accidents or violations will you allow prior to hire? What age do drivers have to be and how much experience do you require? Carriers will expect you to present your hiring and driver-vetting procedures and rules, including orientation and training requirements.
  • Managing drivers. Once drivers are on board, how do you manage them? Do you have incentive programs around SMS and clean inspections or zero accidents? If a driver gets into an accident, how do you determine if he or she should be terminated? What is your drug testing policy?
  • Technology. As more and more fleet carriers employ technology in their trucks, carriers will want to know what type you’re using and how you’re using it. If employing in-cab cameras, are they forward and rear facing or just forward facing? If using e-logs, are you also utilizing the telematics capabilities? What technology vendor do you partner with? Do you employ anti-collision technology that includes adaptive cruise control, lane departure assistance and more? How do you coach drivers based on data available from these systems, including critical event alerts?
  • Fleet maintenance. Carriers will want to know that your drivers conduct pre- and post-trip inspections. They’ll want to know how you handle fleet maintenance – in house or outsourced?
  • Defensibility. Trending “nuclear verdicts” and social inflation in general mean carriers can no longer rely on a fleet operator’s loss history exclusively to determine risk. Instead, carriers are now looking to understand your fleet’s defensibility — or the ability to be defended in court. Because all it takes is a single nuclear verdict to wipe out your policy limits and more, carriers are looking to partner with fleet operators that have a culture of safety in place, are consistent with training and maintenance and sustain a well-documented operation.
  • Stability. Insurers look for financial stability in a potential insured. They’re going to ask what your business is doing during the pandemic and time of civil unrest to secure the financial future of your company? Were safety initiatives dropped? Are you cutting corners? Be up-front and communicate any operational changes due to COVID-19 as well as your continued commitment to safety and maintenance.

COVID-19 and the loss control visit

Due to COVID-19, many loss control visits will take place over the phone or via video conference. Because it’s harder to get a feel for the physical space and daily operations when not on site, it’s a good idea to engage multiple internal experts on the call instead of just a single internal risk management expert trying to champion a wide variety of issues in order to communicate a strong safety culture.

Preparing today ahead of your loss control visit will ensure the visit goes smoothly and will also highlight any issues that need to be resolved prior to the insurance representative walking through your door.

Jennifer Nuest is in marketing for HUB International Transportation. Prior to HUB, she spent almost a decade specializing in the transportation insurance industry in various sales, marketing and loss prevention roles with Protective Insurance. In 2018, she was named a Top Woman to Watch in Transportation by Women in Trucking. Nuest is a Butler University alumna with a Bachelor of Science degree in international business management. She maintains certified insurance counselor and transportation risk specialist designations.