Taking a proactive approach to mitigate expenses

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Courtesy of Waste Advantage Magazine

There are a number of ways to impact your cost of insurance that have nothing to do with shopping your policy every year at renewal. Difficult times call for creative solutions and a proactive approach in order to mitigate your expenses. The intent of this article is to shed light on some ideas you may not have considered.

When a consumer purchases a vehicle there are many aspects to focus on: lighting packages, tarp systems, fuel consumption etc. Rarely do consumers ask about the tires. They come with the vehicle so they must be adequate right? In a recent conversation with a gentleman who had a background in the tire industry as a Risk Manager for a waste hauler in Miami, FL, I learned this was not the case.

When he took the position at the waste company, he did a total survey of their loss history and began implementing systems to improve all aspects of the company’s operations. When he got to the fleet, he noticed almost all of the units were equipped with “stock” 11/22 R tires. He decided to conduct an experiment, so he equipped several of their units with 315/80/22s. His results were staggering. He found the trucks had a reduction in downtime, lower fuel costs, more stability in the unit and the tires had a longer life expectancy. There was also a reduction in mechanical failure.

In this industry, roughly 90 percent of a company’s liability revolves around their vehicles. They are big, bulky and on the road for large portions of the day. By making this change, the company not only improved the reliability of their fleet, but also made the fleet safer which will reduce potential claims related to their auto policy from “self inflicted” incidents. Obviously, the tires are only one aspect of the vehicle, but worth investigating for your company. Proper tires with a quality driver/operator are your best bet.

Many insurance carriers are offering discounted premiums for companies with a proven safety record. This is unlikely a news flash, however, did you know these same carriers are now beginning to offer premium discounts to companies with GPS units installed in their fleet?

There are a number of third-party companies offering GPS installation and monitoring and some are now beginning to lease the equipment instead of just selling it. Insurance carriers love to see GPS. GPS shows you are concerned with your fleet and employees. If a truck is stolen that has GPS, the odds of them tracking it down and recovering the unit are greatly improved as opposed to writing it off as a total loss. You can also prove or disprove where your trucks were at a specific time in the event of a dispute with a potential claimant.

There are many options to choose from when selecting a GPS system. Some companies offer the ability to create “Geo Fencing” allowing the company’s Risk Manager to monitor routes, speed, etc. while others offer cameras to play back 20+ seconds prior to an accident. Some insurance companies even have their own system which they can provide at discounted rates.
Not only are you able to track your vehicles, but you are also able to track the productivity of a driver. Are they where they are supposed to be, or have they taken the company vehicle to an area outside of their assigned grid? Are they speeding through school zones or other speed restricted areas?

There is an upfront cost of installing a GPS system, but over the long run you will make back the investment ten fold. A logical concern many employers face with installation is how the employees will react. Installation of GPS, especially those with cameras, can make the employees feel like the company is watching them at all times. Explain how this impacts the company and its costs. Some employers even go so far as to offer bonuses for driver safety, fuel conservation, etc., all of which can be tracked on these systems if you purchase the necessary package. This turns a potential negative into an incentive opportunity for the employees.

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