Five ways to reduce the risk of catastrophic losses

In the transportation industry, motor carriers face a myriad of risks that can lead to catastrophic losses, including accidents, cargo damage, and the looming threat of “nuclear verdicts” — massive jury awards that can weaken even well-established companies. Consider using the following risk management strategies as part of your operation to help reduce the risk of a catastrophic loss.

INVEST IN DRIVER TRAINING AND EDUCATION

The American Transportation Research Institute’s Predicting Truck Crash Involvement study has shown that a driver’s past behavior increases the probability of a future crash. For this reason, motor carriers should consider investing in driver training to help reduce the risk of severe losses. Examples include road tests, new employee orientation, onboarding, and ongoing training that can help paint the picture that the motor carrier is doing everything in its power to prevent accidents.

CREATE A CULTURE THAT VALUES SAFETY

When safety becomes ingrained in the company’s DNA, the risk of accidents and catastrophic losses may decrease as employees are more likely to adhere to best practices and report potential hazards. Create a culture that values safety by integrating safety at every level, from executives to drivers. Leadership should set clear expectations for safety practices and lead by example.

IMPLEMENT A ROBUST FLEET MAINTENANCE PROGRAM

Motor carriers should strategize how to implement a comprehensive maintenance schedule for their fleets. This program could include regular inspections, timely repairs, and replacing parts nearing the end of their service lives. By proactively addressing mechanical issues, motor carriers can better prevent breakdowns and possible accidents caused by equipment failure.

LEVERAGE TECHNOLOGY TO MANAGE RISK

Technology can be a powerful ally in managing risks. Telematics systems allow motor carriers to monitor driver behavior in real time, providing insights into speeding, hard braking, and other risky behaviors that can be addressed proactively. Likewise, in a legal dispute, technology like inward- and outward-facing cameras may help exonerate a driver involved in an accident.

INSURE YOUR FLEET ACCURATELY

Given the rising threat of nuclear verdicts, carriers should work closely with their insurance providers to ensure that their coverage limits are sufficient to protect against catastrophic losses. Excess liability insurance and umbrella policies can provide additional layers of protection, offering peace of mind during a major incident.

Note: These lists are not intended to be all-inclusive.

CALL TO ACTION

• Consider developing a comprehensive driving training program.