Due to these continued rising costs , last-mile companies are cutting limits where possible and taking on more risk by choosing higher deductibles . While this trend provides some immediate relief from premium costs , it raises concerns about how much risk will be viable for these companies . At the very least , carriers should use these cost-cutting moves to improve areas of need within the business , such as risk management , loss control , and technology . These could help offset increased risk potential .
3 . Hybrid companies : With the growing desire to shop insurance to find more cost-effective alternatives , there continues to be confusion within the market regarding hybrid companies ( asset and non-asset components ) and filing BMC91 / 91X insurance with the Federal Motor Carrier Safety Administration ( FMCSA ) when Federal motor carrier authority is required .
We have seen several insurance providers produce this filing on the last-mile company ’ s behalf without being aware of the full exposures of their operation , whether intentionally or unintentionally . By issuing the BMC91 / 91X filing , the insurance carrier is potentially on the hook for all auto-related exposures of the insured ’ s operation , and they will seek reimbursement from the insured if a claim is paid out .
This becomes increasingly challenging when dealing with hybrid operations that potentially require two different auto insurers : one for the fleet auto exposure of the insured and the other for the HNOA exposure of the insured due to their use of 1099 / sub-contractor drivers . We have seen cases where the fleet auto insurance carrier posts this filing on the last-mile company ’ s behalf , are then brings in a claim derived from a 1099 driver due to the filing and are forced to pay the claim for an exposure they did not know about or collect a premium for . In these cases , the insurer has sought reimbursement for the amount of the claim from the last-mile company , which they are legally permitted to do . The bottom line is that the insured should thoroughly vet this with their insurance broker before such policies are put in force .
CLDA Mag : What important changes are you expecting that involve risk management in the next 12 months ?
Paulozzi : I want to reiterate that last-mile companies must prioritize risk management . However , creating a risk management plan or implementing technology is only part of the answer .
One of the most significant issues facing transportation companies in legal settlements is follow-through regarding management oversight and technology implementation . Companies trying to keep up with demand will keep a driver on even though the telematics indicate he ’ s a habitual speeder and heavy breaker . You can bet that this will come out during a claimant ’ s attorney ’ s due diligence .
The most significant safety measure is a safety / loss control plan , which includes the use of technology . Communicate with the drivers and management about what is expected and follow through at all costs . Do not allow demand to cause you to make exceptions to the rules . This will come back to haunt you .
CLDA Mag : Talk more about the role technology will continue to play in risk management .
Paulozzi : Technology platforms have evolved within the transportation segment . From four-way cameras to telematics to geo-fencing and more ,
50 customized logistics & delivery Magazine I fall / winter 2024