The escalating frequency and severity of property insurance claims are causing rates to rise for buildings across the U.S. With more disasters occurring each year, the number of property insurance claims is increasing. And rising inflation, labor changes and supply chain delays are making building and repairs more costly — raising the cost of those claims.

The transportation industry is feeling the sting of this upswing— especially companies with significant property holdings, such as garages, repair shops, storage facilities and warehouses. But there are steps that fleet carriers and brokers can take to mitigate the impact of hard property market conditions.

To survive this hard property market, transportation companies should:

  • Develop a mitigation plan. Fire prevention is a top concern for insurers, and for many insurers, equipping buildings with fire detection and/or suppression systems is non-negotiable. Fleet carriers and brokers that highlight the strength of their risk control plans will present themselves in the best light to insurers. Plans should include annual infrared inspection of all energized electrical systems and monthly GFCI outlet and electrical cord checks. Plans should also include strategies for reducing risk from charging stations, particularly those using lithium-ion batteries.
  • Implement a strong response plan and include a business impact analysis. Identify potential hazards, analyze existing controls and know your numbers, including the quantity of hazards, their locations and seasonal accountabilities. Make sure there is a written emergency response plan in place, as well as an analysis of how the business could financially handle a significant loss.
  • Update property value calculations. Accurate insurance-to-value calculations are imperative in this inflationary environment. Outdated valuations may result in being underinsured, leaving your property exposed to significant cost gaps to replace or restore insured property. In fact, about 90% of commercial properties are underinsured.1 Fleet carriers and brokers should evaluate their buildings’ value within six months of the insurance renewal to ensure they are sufficiently protected.
  • Establish a scheduled maintenance program. Stand out from other fleet carriers and brokers by maintaining a consistent and well-documented inspection program. This should include a maintenance schedule to review the safety of electrical systems, conducting infrared scans of hydraulic equipment, lithium battery use and charging stations, checking proper ventilation and maintaining clutter-free storage areas.
  • Follow the latest National Fire Protection Association codes. By incorporating NFPA practices into your mitigation plan, you’re demonstrating to your insurance carrier that prevention and protection are safety priorities.
  • Engage and train staff on risk mitigation. Educate, explain and train your staff on safety procedures. Create a risk control team that will ensure safety protocols are followed, such as the proper handling and storage of fuels, chemicals and other combustibles; storage of cardboard boxes, skids and pallets; battery station maintenance, etc.
  • Partner with an insurance broker/risk services specialist who knows your business. Choose an insurance broker that specializes in the transportation industry and shares relevant telematics and other data to help your broker present your transportation business in the best light at renewal. Consistent and transparent communication is key, and it will demonstrate to insurers your commitment to safety.

Contact HUB International’s transportation insurance specialists for more information on navigating current property market challenges within the transportation industry.

1 Risk & Insurance, “Underinsured Properties Are Crushing Reinsurers. Why Proper Valuations Will Be a Focus for Years to Come,” March 8, 2023.