While the old adage, "accidents will happen" applies as much to the trucking business as any other commercial endeavor, transport operators can lessen the impact of collisions and other on-road mishaps by being properly prepared for their eventuality, says Tom Halliwell of Libra Brokers.
 

Tom Halliwell advises all operators to conduct comprehensive risk audits on all aspects of their operations and insure accordingly.

Statistics show that 82% of truck insurance claims are generated from collisions and overturning. Hijackings and theft only account for 9% of claims, followed by fire at 5%, damage to 3rd parties at 3% and windscreens at 1%, says Halliwell.

"If we analyse collision and overturning, the two major contributors appear to be driver fatigue and the lack of defensive driving. Although poor and congested road conditions, vehicle maintenance, lack of law enforcement etc. certainly play a part in the frequency of accidents, the focus should be on the driver, his health and fitness as well as ongoing training in defensive driving," states Halliwell.

Check your pulse
Conducting comprehensive and ongoing risk assessment using various technologies like Fleet Management systems and tachographs is a good way to identify vulnerable areas in the transport operation, Halliwell believes. 

"By identifying the most probable cause of loss based on the operation's past claims history, an operator can implement loss prevention measures and link them to tailor-made insurance solutions," he advises. "Doing this will lessen the impact of those all-too-frequent mishaps and accidents." 

Cover yourself 
To structure an insurance portfolio is the first important step to risk management. "Mindful of his risk exposure, the transport contractor ought to test the impact of major losses not only to his contractual obligations, but also should consider his asset protection, cash flow and cash reserve protection, as well as catastrophe protection (huge liability exposure)," Halliwell explains. "All the above risks can be addressed and covered in terms of insurance products."

Expect service
Once a major loss has occurred, the transport contractor and his insurance broker must liaise closely, adds Halliwell. "Any broker should be available to his clients on a 24/7 basis and be able to render immediate assistance with regards to the recovery of truck, trailers and cargo, securing the accident scene, minimising and managing spillage and pollution in the case of dangerous goods, assisting in the case of hi-jacked vehicles by alerting border posts and arranging for a search helicopter, gathering information surrounding the accident or hi-jack, submitting claim documents and fast-tracking settlement negotiations."

In working closely together, the transport contractor and his broker should attempt to minimize the total cost of the accident as best they can in order to protect the operator's claims history and ultimately to curb his cost of insurance, says Halliwell.
 

By identifying the most probable cause of loss based on the operation’s past claims history, an operator can implement loss prevention measures and link them to tailor-made insurance solutions.

Cost effective
There are various ways in which a transport contractor can reduce the cost of insurance, explains Halliwell. "The aim is for the contractor to retain more of his risk and transfer less risk to insurers. His financial exposure should then be protected with stop-loss payments and aggregate excess structures.

"The important test here is once again the contractor's claims history in terms of frequency and severity and his ability to fund his risk portion from a cash flow and cash reserve perspective."