This post is part of a series sponsored by IAT Insurance Group.
After the unprecedented boom that hit the trucking industry in the wake of the COVID-19 pandemic, trucking companies are now facing lower volumes and excess capacity amid reduced consumer demand. facing.
In the second quarter of 2023, net profits for trucking companies nationwide fell by 22% to 69%.(1). Moreover, as many as 67% of logistics professionals do not expect an increase in cargo volumes in the first half of 2024.(2) Shippers currently have an advantage, with both parcel and full freight rates expected to be flat or decline in the first quarter.2
This change will particularly impact independent contractors, who face not only rising interest rates and policy rates and higher fuel prices, but also inflation and increased operating costs while managing employment benefits.
This market requires a delicate balance between cost control and business protection. Cutting costs shouldn’t equate to cutting corners on insurance, as a lack of coverage can have an even more negative impact on you and your business in today’s environment. Instead, consider your coverage comprehensively to ensure you’re adequately protected in the event of loss or business interruption.
Transfer risk and protect your business
One of the biggest mistakes you can make is opting out of insurance coverage. While it may seem like a cost-saving measure in the short term, the risks associated with such decisions can be more costly. Without insurance, your personal savings and assets are at risk in the event of an accident.
Think of insurance coverage as a way to take risk out of your business during these unpredictable times. The trucking industry offers a variety of coverage options tailored to the unique challenges drivers face, and each coverage serves as an important line of defense against uncertainty as the situation evolves.
The main scopes to consider are:
- Work accident compensation This includes medical insurance, disability insurance, death insurance, and other accident insurance such as surgery and rehabilitation costs for accidents that occur on the job. The disability element is especially important for drivers who are unable to work due to injury, allowing them to meet their financial obligations during the period of disability.
- Compensation for physical damage – There are two important considerations when determining appropriate property damage coverage. 1) your insurance limits for coverage, and 2) your selected coverage. It’s important to choose an insurance limit that reflects the value of your car. Choosing the lower limit to save money could result in non-covered claims if your vehicle sustains significant damage or is totaled in an accident. Physical damage coverage comes in many forms, from basic coverage that repairs damage to your vehicle to more comprehensive extensions that can protect you from different types of losses, such as downtime and mechanical failure. . Contact your insurance company to find out the insurance limits and coverage that best suits your needs.
Other coverages your company should consider include temporary workers’ compensation, occupational compensation, passenger compensation, and non-occupational compensation.
Tailor your coverage to your unique needs
The current freight downturn is an undeniable challenge, but for smart fleet owners and drivers, it’s also an opportunity to implement cost-saving measures, strengthen operations, and enhance insurance to better protect your business.
IAT offers coverage options tailored to the trucking industry, such as those listed above. National Association of Independent Truck Drivers (NAIT). NAIT members have access to a variety of commercial and life insurance policies, as well as special discounts on medical insurance, tires, hotels, and fuel.
Contact a Loss Control Specialist
Have questions about how to reduce your risk? Email losscontroldirect@iatinsurance.com Please give me a chance to see the answers to your questions in future blogs.
Written by Scott Miller and Dave Logan
(1) Reuters “U.S. trucking companies expect downtown freight volumes to reverse after quarter,” August 28, 2023.
(2) CNBC “Global freight recession continues into 2024: CNBC supply chain survey,” November 7, 2023.
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