R&R Insurance Blog

In 2011, DOT-regulated truck, bus and motor coach companies paid $30,674,218 in fines for failure to comply with Federal Motor Carrier Safety Regulations (FMCSRs). The average fine per case was $5,050.

One of the most costly violations is the falsification of a driver log. In these cases, companies paid an average fine of $9,394. The next most costly violation was the transportation of hazardous materials without a properly prepared shipping paper. The average cost in those cases was $8,578.

According to Rob Moseley, head of the transportation department at Smith Moore Leatherwood, juries are relatively accepting of truck drivers who make mistakes. Moseley said in a recent interview, “Juries are much less forgiving when safety issues are ignored at the management level of the company.” Adding, “A trucking company gets to explain two problems or inconsistencies. After that, the jury doesn’t listen and will punish the trucking company.”

Additional costs to a non-compliant company:

• Increased frequency of inspections and the additional violation fines identified during these inspections
• More detailed inspections (e.g., more Level 1 inspections) and the associated violations identified
• Impact on insurance rates
• Loss of business due to poor CSA scores
• Reduction in contracted rates for carriers with poor CSA scores

Being compliant means saving money. Contact me to discuss how to take proper actions to keep your company compliant.

A mandate of electronic on-board recorders (EOBR) seems closer than ever. Many carriers are staying ahead of the curve by installing EOBRs today. Not only are they seeing operational efficiencies and improved fuel management, there are compliance benefits:

1. Increase log accuracy
   - Typically a comparison of GPS to driver’s log needs to be completed. With an EOBR there is no need for the audit because it automatically ties vehicle movement to driving time
2. Form & manner violations are virtually eliminated
   - EOBRs prompt the driver to enter data or it is filled automatically – thus eliminated math errors when calculating total hours for the day or leaving fields blank (among the top four violations in the CSA Fatigued Driving BASIC)
3. EOBRs are present and current
   - Drivers with paper logs struggle to keep their logs up-to-date and keep them present if/when requested by an authorized party
4. Real time duty status helps reduce violations
   - Dispatchers and drivers can monitor drivers’ hours-of-service real time thus avoiding situations where drivers may be forced to drive when they are out of hours

Contact me to discuss how your company can increase efficiencies with the use of EOBRs and as important, how EOBRs can keep you compliant, reduce fines, and affect your premiums.

With the recent downturn in the economy, business focus has turned from safety to more “important” financial objectives. The truth of the matter is that poor safety initiatives could end up being the most costly part of the year for an organization. The associated costs of an ineffective and poor safety program, such as claims cost, insurance increases, loss of production, damaged equipment, potential loss of business, and market impact make it all the more important for organizations to invest in the value of safety. It is an investment in the most valuable assets you have: your people and your reputation.

A proactive approach to safety can result in a 52% reduction in incident rates over a several year period. Some ways to increase safety include identifying risky driving behaviors, defensive driver training, reinforcing driving skills, and an injury & illness prevention program for employees.

The first step to implementing a plan is to identify the correct partners. Education, equipment manufacturing and technology partners can provide resources to identify cause of incidents, educate skills, and develop processes to avoid incidents. Commitment starts with personal ownership, commitment by each employee, and reinforcement by managers.

As a R&R knowledge broker, I welcome the opportunity to discuss ways to work together in building a cost effective safety plan or enhance your current processes. Contact me to get started!

Not long ago, I can recall when it seemed like only the larger, national, insurance carriers specializing in trucking insurance would take into consideration SafeStat Scores in underwriting a trucking Risk. This included carriers like Great West, Northland, Lancer, Sentry, Carolina Casualty, Continental Western, etc. At the same time very few, if any of the underwriters working for the smaller regional carriers, at least in the Upper Midwest, knew where to look for this information let alone how to interpret it. When I speak of smaller regional carriers, I’m talking about companies like Acuity, Integrity, Secura, General Casualty, etc. From my standpoint as a trucking insurance agent, this was a good thing, the less they knew, the easier it was for me to place a piece business with them especially business that was marginal from a SafeStat standpoint but that may have had good loss experience. Well, those days are over thanks to the Central Analysis Bureau.

Now, every insurance carrier we access specializing in trucking insurance subscribes to what is termed a "CAB Submission Report" from the Central Analysis Bureau. To put it in a nutshell, this is a report available by subscription. They gather their information from all of the various FMCSA websites including SAFER, SMS, and Licensing and Insurance websites. They take that information and put it in a nice easy to read report focusing on key points for underwriting review. Even the novice trucking underwriter will pick up on problem areas. In addition to pointing out all of the relevant information, the underwriters can sign up for alerts and be made aware if there are any serious violations or changes in scores within a particular category of SMS scores. For the first time in my career, I have actually had companies cancel policies, not because of loss problems, but strictly because of a conditional ratings and SMS scores.

1. How are the underwriters using this information? I asked some of my underwriters this same question and here are some of my responses:
   - As an initial screen of eligibility
   - To verify radius of operation and type of operation whether contract carrier, common, or broker
   - Type of commodities hauled
   - Prior insurance carrier information (do you shift your insurance frequently?) - also number of cancellations, etc
   - CSA rating
   - Out of Service - how often and why
   - Number of trucks and total mileage - is this trending up, down, or stable
   - Any hazmat indications and who are they shipping for? They will be looking for travel in higher population density areas.
2. Pricing, higher CSA scores translate into higher rates; lower CSA scores translate into more favorable rates.
3. Underwriters will use this report to see if there are any other operations that had authority at the same address. They're checking to see if there were any chameleon carriers operating under a different name. They will check the vehicles listed on the inspection reports with those submitted on the equipment list.

Insurance underwriters are now using this as one of the tools in their tool box. Some companies are even imposing specific scoring criteria. It’s more important now more than ever to be constantly trying to improve these scores. As Will Rogers said, “even if you’re on the right track, you’ll get run over if you just sit there.” In these economic times, it’s more important than ever to partner with people who can dramatically affect your bottom line. This is done through knowledge, resources, and ingenuity. Contact me to discuss how we can work together to lower your risk and save you money.