The trucking industry is facing an insurance crisis. This year, Zurich Insurance Group AG and American Internal Group Inc., dropped coverage for many for-hire fleets. The law requires coverage of $750,000 per accident, and many trucking companies insure around $1 million. According to Wall Street Journal reporter Brian Baskin, “Truckers are finding it harder and costlier to get fleet coverage, and many trucking companies are having to back out of the industry all together.”
Baskin talked with Jetco CEO Brian Fielkow to get his opinion what is happening in the industry when it comes to insurance:
In 2013, concerns about sleep-deprived drivers led to stricter limits on truckers’ hours behind the wheel. And, ELD mandates will kick in next year. “Higher insurance costs are spurring the trucking industry to adopt accident-prevention technology, including devices that alert drivers if their trucks drift outside their lane.”
Fielkow believes that what is really driving costs are the $25,000 to $50,000 settlements; the ones that aren’t worth the investment to take to court. It’s the “frivolous litigation that’s really driving costs in the insurance system,” he said. Higher insurance minimums and closer scrutiny of trucking safety are actually good trends, though they’d be better if tort reforms were part and parcel of it as well, although Fielkow doesn’t see that happening any time soon.
It all comes down to a motor carrier’s safety culture. “Safety isn’t just the right thing to do; it’s a bottom line proposition,” he stressed in an interview with Fleet Owner. “We’re talking about a great return in terms of dollars and cents beyond just your insurance premium costs.”
For example, Jetco installed in-cab video systems in all of our trucks two years ago. Jetco also uses the cameras for training purposes.
A safety culture delivers hard-core bottom line benefits. “No amount of rules and regulations will deliver safety excellence,” said Fielkow. And, as the trucking insurance market gets tighter and more expensive, creating a safety culture must be at the forefront.