Wholesale & Distribution International - Fall 2017 - 13

INNOVATIVE SOLUTIONS
In an effort to manage escalating insurance expenditures, many distribution
companies are searching for innovative
solutions to lower premiums. Considering the amount of time spent on the road,
the first step for many distribution companies to reduce accident risk is to minimize unsafe driving behavior. In 2010, the

Insurance Institute for Highway Safety
found that nearly 287 million miles were
traveled in commercial trucks alone. Effective hiring practices like pre-employment screening and post-offer testing
have proven to be critical, but are often
not enough.
One option that is gaining popularity
is the use of advanced in-vehicle safety
technology, designed specifically to reduce the likelihood of an accident and,
in turn, any subsequent litigation. Technology can be installed in vehicles to
monitor and correct the driving habits
of their operators. Vehicle diagnostics
will collect data relating to an employee's
acceleration, harsh braking and even cell
phone usage. By taking steps to identify
drivers that have a history of hazardous
behavior, additional safety education can
be required to correct negligent habits -
which will ultimately lower the chances
of an accident.
In 2015, the Federal Motor Carrier
Safety Administration named collisions
as the cause of 74 percent of fatal crashes involving large trucks. Because vehicle collisions are not only dangerous,
but they can often lead to multi-vehicle

INSURANCE

The notable hike in premiums is partly
attributed to the increased frequency of
claims. In 2016, Verisk Analytics reported
that accident occurrences were at their
highest level in decades, rising steeply
throughout 2014 and 2015. Insurers are
not only witnessing more claims, but also
an uptick in claim severity. For instance,
the cost of repairs has risen significantly over the last several years as a result
of the types of automobiles on the road.
Since the effects of the 2008 recession
are lessening, people are beginning to
purchase newer, more modern vehicles.
These cars are often embedded with expensive technology like adaptive cruise
control and lane-keep assist features. Accidents that damage this technology can
be extremely costly to repair.

accidents, distribution companies can
consider implementing loss control
techniques such as collision-avoidance
systems. This technology has an audible
alarm that will sound if pedestrians, cyclists or even other vehicles are getting
too close to the commercial truck. Because the truck driver is alerted to the
potential danger, many collision-related
accidents can be evaded.
Video-based safety features like dash
cameras and dual vision windshield
cameras can be installed to accurately
depict a series of events should a driver
or a company need proof to assist during
claim litigation. Unfortunately, in the
event of an accident, the trucking company is commonly named as the defendant in litigation due to their availability of high limits. According to the U.S.
Department of Transportation, only 20
percent of accidents involving heavy
commercial vehicles are the truck driver's fault. By recording what happened
before, during and after, the truck driver
can be exonerated for an accident caused
by another vehicle.
Although progressive in-vehicle safety technology considerably reduces the
probability of an accident, fleet managers
should not rely entirely on this approach.
Thorough employee screening and ongoing driver education should also be
combined with standard operating procedures and mandated vehicle safety protocols. Distribution companies should
work in tandem with their insurance
broker to analyze loss data and develop a
proactive risk management strategy tailored to their specific operation. q
Steve Washkalavitch is a producer at The
Graham Company. Drawing from 13 years of
insurance and consulting experience, Washkalavitch designs and implements comprehensive insurance programs and long-term
risk management strategies through extensive exposure analysis, financial modeling
and customized service delivery.

Fall 2017 www.wdimagazine.com

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Table of Contents for the Digital Edition of Wholesale & Distribution International - Fall 2017

Table of Contents
Wholesale & Distribution International - Fall 2017 - Cover1
Wholesale & Distribution International - Fall 2017 - Cover2
Wholesale & Distribution International - Fall 2017 - 1
Wholesale & Distribution International - Fall 2017 - Table of Contents
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Wholesale & Distribution International - Fall 2017 - Cover3
Wholesale & Distribution International - Fall 2017 - Cover4
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