Risk Management

As an owner of a trucking business, one is also in the business of managing risk - big risks because big trucks have big accidents, although few and far between.

When a carrier purchases insurance (even though most coverages are mandatory), he essentially transfers that risk to the Insurer and buys peace of mind. He may retain some of the risk himself in the form of a deductible. And if the equipment is paid for, he has the choice of retaining the risk himself for the physical damage coverages.

As a client of Rainbow Insurance Brokers and the Insurer, a carrier will have the peace of mind knowing that a broker will work with the carrier to minimize the effects of loss exposures. It must be a very pro-active approach and not passive.

It is incumbent upon a broker to have the client's best interests at heart, and work with him, instead of just selling to him. It is also incumbent upon the carrier to do everything possible to prevent losses, because if he is not interested in preserving his business, why should a broker be?

Especially in a smaller business, an uninsured loss can mean bankruptcy. A theft of the entire vehicle could result in same, because now not only is the asset gone, so is the potential to earn income. If claims are not reported immediately, it reduces the chances of recovery dramatically in the case of a theft. Even if a vehicle is insured for theft, there will still be a time lapse before settlement is made to allow for investigation and possible recovery. The carrier is still left with a "Business Interruption." (there is generally an 80% success rate of recovery on thefts if claims are reported within 24 hrs).

Business Interruption insurance is quite an extensive field and is sold to many commercial enterprises. Basically it pays for income lost because of the interruption of business (Profits Form, Gross Earnings Form or Extra Expense Form). Unfortunately, Business Interruption is not very extensive in the trucking industry and known as "Down Time." It is definitely not an automatic part of the auto policy.

If a driver is injured in an auto accident, there are provisions for his PERSONAL lost income under Accident Benefits or Third Party Liability depending on the seriousness of the injury.

What can a carrier do to prevent losses? Anything that is done is good, and certainly hinders loss, but of course is not foolproof.

Examples are:

Lastly, in the words of a retired police officer who now investigates theft in the Toronto area, "ACCOUNTABILITY & ATTITUDE," because a proper dose of both in place leads to a lack of opportunity for losses to occur.