Too Much Risk, Little Reward
Industry initiative aims to reduce fleet insurance costs and legal liabilities.
Deborah Whistler
Editor
We've all heard the horror stories of what can happen to a trucking company when one of its trucks is involved in a catastrophic accident. Juries have regularly awarded outrageous damage awards to "victims" - even when the truck driver is proved not at fault in the collision.
The risks are upside-down, especially for smaller, undercapitalized carriers. One accident with a large award or increased insurance premiums can pull a fleet under.
There is a new industry initiative aimed at helping fleets reduce their risk and exposure. The White Stone Group, an industry consulting firm based in Rochester, N.Y., has formed a group called "The Transportation Alliance." According to Michael Holahan, president of The White Stone Group, an SRO would be qualified to work with any trucking company — either as an employee of that company or as a consultant — to review the fleet's hiring, safety and compliance programs. An SRO would be trained in best industry practices and qualified to give a fleet a "Fleet Safety Certification" when those standards have been achieved.
This certification would be based on reaching performance standards in driver hiring, development, training and motivation. It would also involve tracking performance results of drivers over time and documenting each step in the process.
The purposes of this documentation would primarily be twofold, says Holahan: 1) to provide actuarial evidence a fleet can bring to its insurance carrier to qualify for lower premiums, lower deductibles and lower cash reserves, and 2) to give the fleet documentation that would stand up in court to dismiss claims make by plaintiff attorneys of negligent hiring or negligent retention.
This "Good Housekeeping seal of approval" - type of certification would insure fleets that they have done all that is reasonably and cost-effectively possible to protect themselves against high insurance costs and the threat of punitive damages in the event of catastrophic accidents.
The Transportation Alliance is seeking formal charter as a committee of the American Trucking Assns. and/or the Truckload Carriers Assn. This committee would function entirely under the guidance and control of the ATA and/or TCA with an officer of either organization at its head, says Holahan.
The committee would define the "best practices" for hiring, safety and compliance in the industry, address and resolve any possible legal liabilities in the content of the program and set the standards for the certification of Safety Review Officers and for Fleet Safety Certifications. The committee would also oversee the development of the content of the manuals and documentation necessary.
"The whole is greater than the sum of the parts. It is our feeling that if the transportation industry can be united to address the challenges presented by rising insurance costs and increased legal liabilities, a focused and comprehensive solution can be found to make trucking companies more profitable and financially sound," says Holahan. "This in turn would benefit the entire transportation industry with all its ancillary components, and shore up transportation's place as a mainstay in our nation's economy."
Holahan says Transportation Alliance currently has varying support from trucking companies and associations, insurance companies, law firms and safety & compliance-related transportation industry suppliers. For more information, or to get involved, contact michael-holahan@theWhiteStoneGroup.net
E-mail Deb at dwhistler@truckinginfo.com
