An Insurance Policy On Your Insurance Policy

Even in 2022, it is still common in Ontario that a lot of trucking companies haven't set up a WSIB alternative program for their owner-operators yet. Some carriers will start by making it mandatory that owner-operators purchase some type of insurance coverage no matter where it is from and provide certificates of insurance to Safety monthly. Other carriers have been running a mandatory program for 30 years where any new owner-operator that joins the fleet is automatically enrolled in that fleet's program.

Other carriers are nervous to make insurance mandatory and piss off an owner-operator who could leave and go to another fleet at any minute. I completely understand why Saftey staff who know a lot about recruiting are nervous to start a mandatory program. Owner-operators are hard to come by right now and they are extremely beneficial to a trucking companies success. And if there is anything I learned from early 2022 in Canada, the word mandatory doesn't sit too well with some of these truckers!?

Just last week, a Safety Manager at a trucking company was telling me they had a driver open up an accident benefits claim on their commercial policy. Over a year later, the claim is still open on their loss run report with over $500,000 reserved now. Large claims can put your commercial policy at risk for a non-renewal which could force you to switch insurance companies, approach Facility Association or even park your trucks temporarily in really bad cases. Imagine that? Imagine calling each of your drivers as they are in Chicago or Florida or Texas and saying "Hey, stop driving right now because that $300,000 piece of equipment you are driving on busy highways is uninsured because our policy was cancelled today."

Why do large claims put your commercial policy at risk for renewal? Insurance companies are businesses just like yours. Businesses need to make money in order to continue operating. They must be profitable to pay claims to other insureds, their payroll, their operating expenses, taxes, the list goes on for any business. A large claim could reflect a poor loss ratio on your commercial policy.

What is a loss ratio? A ratio of the claims paid by an insurer compared to the premiums paid. So for the person above that has a $500,000 reserved claim on their report, if they pay $1,000,000 in annual insurance premiums, their loss ratio is 50%. If they pay $500,000 in annual insurance premiums, their loss ratio is 100%. If your commercial policy is losing an insurance company money, I would argue there is reason to look deeper into safety practices, patterns and the potential of future claims the insurance company would have to pay.

Now to put this all together... if that trucking company had a WSIB alternative insurance policy, that $500,0000 claim would never have touched the commercial policy. The claim would have gone straight to the WSIB alternative policy before any other policy would know about it. The driver receives income during the time that they are injured, and expenses are paid for something like chiro or physio so they can get healthy again and get back to normal life on the road again.?

That is a happy driver, and a happy commercial insurer! A commercial insurer who might keeps your rates consistent every year that really partners with you during claims. This lets you make better decisions for the future of your business because you are able to budget for your insurance premiums instead of having a wild increase on your renewal. We really encourage business owners who want to grow, want predictability and want less risk to inquire about getting a program set up for their company. In a way, it is insuring your commercial insurance policies longevity, rates, coverage and flexibility.

Let me tell you, it feels amazing to be able to support Canadian trucking companies through these policies knowing it is a smart business decision and adding much better coverage for the drivers of these fleets. There is a reason why all of the top trucking insurance companies in Canada recommend the WSIB alternative policy to every fleet they insure.