Underwriting your fleet

December 15, 2010
by Paul Lucarelli

PURCHASINGB2B MAGAZINE, NOVEMBER/DECEMBER 2010: No matter which type of vehicle you choose for your fleets, accidents are bound to happen.

It’s understandable—the people who drive your vehicles were likely hired for their professional skills, not their dexterity on the road. In fact, Transport Canada reports that 75 percent of crashes are caused by driver error.

Working with an experienced fleet insurance broker and taking advantage of their value-added services can significantly improve this statistic, keep your drivers safe, and save your company money.

When making purchasing decisions, you’re always looking for the best quality and service from your vendors. With an insurance partner, this should mean more than just service in the event of a claim. When it comes to fleets, a good insurance partner will support you with loss-control as well, helping your team identify potential risks and costs that could affect you.

Companies who adopt an internal loss-control program usually experience significant declines in claims frequency. Not only does that translate to less down time for a fleet, it means drivers are operating more safely on the road.

Loss-control consultants can have a significant impact on your business. Whether they’re helping a business prepare to pass a Ministry of Transportation audit or coaching your drivers through courses to meet Canada Safety Council guidelines, they often act as a member of the team.

In fact, for many companies without a fleet manager, an external loss-control officer often spends a lot of time in-house, acting as safety officer. A loss control consultant working with an electrical company with a fleet of vans, for example, could provide consultation on proper hiring guidelines for drivers, support with wording for contracts, or assistance maintaining driver files.

Loss-control support should be a value-added benefit of working with an insurance company, so make sure the insurer you choose is prepared to deliver.

When you bring in a new vendor to pitch for your business, you’re always looking at how they can meet the needs of your company. Although all insurance policies may seem like standard products, each has unique characteristics, and you should consider these differences when selecting a partner.

Hire a specialist
Loss control in itself is one of these differentiators, but you should also look for a partner who specializes in corporate fleets and can tailor its services and coverage, whether your fleet is made up of light commercial vehicles, small vans and trucks, private passenger vehicles or a diverse mix of each.

Before selecting an insurance partner, tell them about the activities of your fleet and make sure they can meet these needs. Do you have pool cars where a number of people share the same vehicle? Do the ages and experience of your drivers vary? Will your fleet travel between provinces or outside of Canada?

Not all insurance companies will cover your driver while travelling in the US, for example, so discuss these details and get them in writing. A broker can talk you through these issues, negotiate with your insurance company and adapt a program to meet your needs. That could mean customizing your coverage with higher deductibles or increased limits of liability—whatever works best for you.

That said, finding a good broker partner is key to your insurance experience. Not only will they help you navigate the ins and outs of your requirements, but they can also help you find the right coverage at the right price, and offer advice on how to get the most value from your insurance purchases. Whether it means purchasing vehicles with good safety records, choosing lower horsepower options, or managing your upgrade options to control costs, their advice can help you save money on your insurance premium and potentially affect the safe driving of your entire fleet.

Insurance can be difficult to understand if you’re not dealing with it every day, but it’s an important part of your purchasing decisions, so pay attention to the nuances that separate one product or company from another. An insurance broker is your support through this process, helping you make decisions that best meet your needs.

You can’t prevent every accident, but you can set up your team with the vehicles, safety practices and coverage that keep them safe and save you money.

Paul Lucarelli is underwriting director, fleet, casualty and marine at RSA Canada.

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