To boost the farm’s bottom line or just keep vehicle fleets working during off-peak periods, agribusinesses often look to diversify their service offerings.
Whether it’s taking on municipal jobs or adding distribution or product bottling to the core business, branching out to other areas of revenue helps maintain market share and keep a fleet of trucks and drivers working year-round. The question is: Will your insurance carrier cover your fleet when you do?
The answer is not so simple. Many insurance carriers are hesitant to permit engagement in previously uninsured activities, as it presents increased liability.
Even when it’s possible to add a service or function to your current coverage, it will likely increase costs in an already hard market where premiums are high, and limits are low. Should your agribusiness engage in the activity without the carrier’s permission, there’s a good chance future claims could be denied.
Hard transportation insurance market considerations for agribusinesses
After a few years of catastrophic claims, large transportation settlements and an increase in compliance requirements for agribusinesses, the transportation insurance market has raised premiums and tightened limits on farming to make up their losses.
When combined with a driver shortage and the desire to diversify service offerings, there is now a need for agribusinesses to position themselves as a best-in-class risk to insurance carriers. This positioning is still critical, even with as few as 10 to 20 vehicles in your fleet. Making your business one that transportation carriers want to take a risk on is best accomplished by instituting the following risk management practices.
- Thorough pre-employment screening. Insurance carriers will want to know that you’re doing ample background checks on drivers. This includes motor vehicle record (MVR) monitoring, drug tests when applicable, and medical record cards. Make sure you’re not offering the driver a job before their MVR check comes back. If the insurance carrier says not to hire the individual and you have done so already, you could be putting your business at risk for an employment practices liability (EPL) claim.
- Post incident and near miss training. When there’s a near miss or accident, it’s important to interview the driver to determine exactly what happened and document the details ahead of a claim. Ideally, this follows a pre-established protocol of near misses. It is important to build out lessons learned from the near miss or accident and include them in future driver training, especially when the mistake is a common one.
- In-cab telematics. More and more insurance carriers are requiring in-cab telematics for agribusiness vehicles to both track the temperature of food for spoilage and control and reduce distracted driving losses. They’re either providing a stipend for the technology, or the actual equipment so they can have access to the data. In-cab telematics allows the agribusiness or insurance company to monitor drivers in real time, follow the temperature of the food, from the location of the truck to its delivery.
Contact your HUB Agribusiness and Transportation specialist for more information on instituting these risk management best practices and creating a narrative to position your agribusiness as a best-in-class risk for transportation insurance carriers.