Drivers and Risk: An Insurance Perspective

Having safe and qualified drivers is the most important asset of a successful small trucking company. The luxury of having a risky driver is nonexistent.  To grow a risk adverse company, there should be a guideline for driver qualification. The measured characteristics of drivers that affect risk are age, driving experience and the driver’s motor vehicle record (MVR).  All three of these factors dictate insurance premiums and driver qualifications for insurance companies. When hiring new drivers, they must be affordable and reliable. Using set guidelines will guarantee a driver is affordable. Using previous employment history and recommendations will give an understanding on the reliability of the hired driver.

If the driver meets the qualifications that the company has set forth, using the FMCSA’s pre-employment screening program (PSP) will give the last remaining details and assurances that the driver is a good hire. The FMCSA’s PSP provides details about the past five years including crash data and three years of roadside inspection data. Using this additional data, a company can gauge the safety of a driver through concrete numerical figures. According to the FMCSA, “Companies using PSP to Screen new hires lower their crash rate by 8% and driver out-of-service rates by 17%, on average, compared to those that do not use PSP.” (FMCSA, https://www.psp.fmcsa.dot.gov/psp/public). Using the PSP program, MVR checking, and employment history will remove the risk of negligent hiring.

The risks sustained for a company driver versus an owner operator vary.  Generally, Owner-operators indicate less risk due to several factors. Owner-Operators carry their own physical damage, which costs the company less overhead cost. Owner operators generally have more experience and are older than the standard company driver. The replacement cost for an owner operator is generally less due to the lease agreements that are in place. While there is less risk and maintenance for owner operators there are fewer potential earnings for the business owner.

Driver Health is an important factor for driver retention. Neglecting driver health will cause higher turnover. NASTC provides several programs that help companies be proactive in improving driver health and facilitating improved chances for a pass from the medical examiners within our driver health and wellness program. One part of the driver health and wellness program is the sleep apnea program. As litigation increases from the government about the health of drivers, it is important that trucking companies are proactive in the investment of driver health. Using our sleep apnea program minimizes the possible financial and health risks by using preemptive actions.

HelpMD is another program at NASTC that we encourage companies to obtain. It is a telemedicine program in which drivers can obtain prescription medicines for common illnesses over the phone. Since drivers are over the road, access to proper medical care is reduced. Using Help MD reduces the risk that a driver is out of work due to sickness which will cause them to be safer, happier, and healthier.

Incidents that cause injury to drivers on the road are inevitable. It is important to not only protect your equipment with insurance but also your drivers. Protecting your drivers, which can include yourself, can be completed with the use of workers compensation or an occupational accident plan.

Drivers are a variable that affect every aspect on a trucking company. In small trucking companies it is more important that the standard of hiring be greater than those of the larger ones. To mitigate risk, invest in the process of hiring drivers and maintaining drivers. This will pay dividends in the long-term success of your company.