In the wake of cascading nuclear verdicts, increased litigation and rising settlements are taking its toll on the trucking insurance marketplace. Moreover, a backdrop of burgeoning technology, the driver shortage and the booming online marketplace leading to a demand for more trucks on the road adds to the manifold of minefields in the market.
As carrier after carrier is dealt a final death blow by the courts for infractions that were merely minor infringements only a decade ago, it is today more and more vital that insurance agents raise their game to protect their clients.
Here are four ways agents can help their trucking clients manage their risk:
1) Access public information. Everything that happens to an interstate motor carrier is public record. From whether they’ve crashed, where they’ve crashed and if they’ve had inspections to the cargo they’re hauling, the number of units they own and how many drivers they employ, “all that information is available,” says Tommy Ruke, TRS, CIC, co-founder of Motor Carrier Insurance Education, which is seven years old and has been recognized by motor carriers and insurance providers.
If the information that’s listed on the insurance application doesn’t match what’s on the public record, “it’s not going to get off the underwriter’s desk,” Ruke says. Moreover, the public information provided an excellent opportunity for an agent to “approach the insured and say, ‘Look, here are some problem areas. We’ve got to straighten this out.’ That’s the kind of stuff that agents need to bring to smaller motor carriers who don’t have the time to do these kinds of things.”
2) Higher limits. With rates rising year on year, Dan Clements, director of sales, Transportation, Sentry, has started to notice more requests for larger auto liability deductibles.
“These requests are coming from the insured because their rates are going up and they want to see what they can do to manage costs,” he says. “If a motor carrier strongly believes in their safety culture and technology, it’s an option to consider, especially since these rate increases are going to keep increasing.”
3) Cyber. Like every other industry, trucking is also susceptible to cybercrime. Hackers are deploying previously unknown tools in cyberattacks targeting shipping and transport organizations with custom trojan malware, according to ZDNet.
“The threat of cyberattacks is very real, the number of attacks is growing and each attack—whether it’s a spoof email, a ransomware attack or something even more sophisticated--has the potential of crippling a company,” says Nick Saeger, assistant vice president of Transportation Product, Pricing & Underwriting, Sentry. “Cyber liability is something that should be recommended to trucking companies of all sizes.”
4) Specialization. Possessing specialty expertise in the trucking insurance domain is not only essential, but it’s a two-way street, as well.
For agents, “working with an insurance company who is well versed in the space is imperative,” Clements says. Likewise, “it’s also imperative for the agency to specialize,” he says, adding that unless an agency has an experienced and dedicated team, they’re unlikely to get an appointment to write business with Sentry.
Moreover, “it’s becoming more and more important, almost incumbent on the agent, to take on a more educational role with the customers,” Clements adds. “Agents must make sure the customers know what they’re up against and, more importantly, what they can do to be prepared to proactively address anything that might happen to them in the event of a legal occurrence.”
Meanwhile, Ruke’s biggest piece of advice is to “stay current” and “learn the business.” “Unless you understand about the public information or what certain scores mean, you’re not going to be successful,” he says. “There’s information available, either online or through the webinars, that helps agents learn enough about the business to stay out of trouble and know where the pitfalls are. You’ve got to be educated.”
The bottom line is: “If you’re not willing to help the insured and your idea is to just deliver the policy, then please don’t try to insure anyone,” Ruke says.
Will Jones is IA senior editor.