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Does where I operate my trucking business affect my insurance?

Business Insurance

By Joanne Lemna | July 20, 2016

Even with a slow-growing North American economy the trucking industry is a rapidly expanding marketplace. Businesses need goods and products moved from city to city province to province and country to country. This need creates a great opportunity for anyone trying to establish a new trucking business. But steep competition in this industry means you need to be smart about where your money goes and how you grow your business.

One vital factor in creating a profitable trucking business is where you choose to set-up your operations. Not only does this dictate your proximity to clients your need for fuel and the safety of your trucks it also impacts how much you pay for insurance.

Expert Tips on Trucking Business Insurance Needs

Whilecommercial truck insuranceis a vital part of protecting your business the question most business owners want the answer to is: How do I keep my premiums low while still getting the level of protection my operation requires.

“What you really need is an effective insurance strategy ��? explains Lou Smyrlis Editorial Director atTrucknews.com. After years of talking to the experts Smyrlis has five tips on how to make insurance work for you and your company.

Tip #1: Make your insurance broker your partner.

“They know the industry ��? says Smyrlis “they have their fingers on the pulse of this industry and can show you ways to control your insurance costs if you consult them.��? Make sure you talk to yourindependent insurance brokerto get the best coverage at the best cost for you and your business.

Tip #2: Hire good drivers and put them in good working conditions.

“Good working equipment attracts good drivers ��? says Smyrlis. It also means fewer costly breakdowns and less chance of catastrophic collisions—accidents that can impact your bottom line and prompt a spike in your insurance rates.

Tip #3: Walk the walk.

If you set high performance standards like establishing routine and mandatory safety checks you and your employees are more apt to find potential problems before they turn into big expensive issues.

But to one step further. Keep a log on what you do exactly to ensure the safety and optimal operation of your trucking business. This log not only helps you track your progress it can also help to prove to your insurance provider that safety is key in your business which can help lower your insurance premiums.

Tip #4: Choose your claims wisely.

“You will run into a claim it’s part of business ��? explains Smyrlis “but there are situations when it’s better to take a hit rather than let insurance companies pay out.��? Smyrlis suggests that after every collision or insurable event do a post-mortem. “Don’t be shy about bouncing a possible insurance situation off your insurance broker for guidance.��? What you’ll find is that it might be better to pay out-of-pocket for smaller claims rather than go through your insurance provider and have your rates increase dramatically.

Tip #5: Make changes when required.

You and your trucking business are on the road; busy with day to day operations; out in the thick of it building a business. This means that mistakes can happen and claims are filed. But every time a situation occurs take a step back. Ask yourself: Is this the best way to operate? Could I do something better? By reviewing and amending your business practices you can actually help reduce the risk of claims and the possibility of rate increases. That’s good news for your bottom line and for your insurance provider says Smyrlis.

Very often the first areas you’ll focus on will be where you spend the most money:  fuel equipment and drivers. But these aren’t the only areas where you can make changes and even save a few dollars. Some of the biggest back-office areas offer opportunities to save areas like employee benefits and commercial insurance.

Factors That Impact Your Trucking Business and Your Insurance Needs

There are a few main areas that will impact your commercial vehicle premiums:

  • Do you have speeding fines or traffic offences? Do the drivers you employ have clean driving records? The fewer infractions and the longer a person has driven without infractions the better the rates.
  • Where are your trucks stored? Are your trucks kept in an open easily accessible spot or are they parked in a private covered lot? Where are they stored when not in-use especially overnight? The riskier the place of storage the higher your premiums will be.
  • How muchliability coveragedo you need? Remember liability helps protect you and your business from exorbitant legal and injury costs. While liability coverage is cost-effective it goes without saying that the more coverage you require the more in premium costs you’ll pay.
  • What type of operation do you have? Do you haul dangerous goods? Do you work for the public or are you strictly contracted by companies? The type of trucking business you operate will directly impact the premiums you pay.
  • Where you do operate? Your radius of operation and where your business base is located will directly impact your insurance premiums. The longer you have to travel the more time your trucks are on the road and the greater the statistical chance of getting in a collision.
  • What is the condition of your trucks? The age condition and safety features of your trucks are a key component in establishing your insurance premiums.

To keep your premiums as low as possible without risking your coverage remember to consistently review all the factors that impact your bottom line and when possible consider making a change.

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