August 17, 2017 | Cargo Insurance, Errors and Omissions, Industry Insights, Shipping
How Strong is Your Risk Management Toolbox?
Logistics service providers and transportation intermediaries in order to run well-oiled operations should possess the risk management tools needed to help minimize losses and transfer risk. There are a number of components required in having a strong risk management toolbox that will go the distance for optimum success.
These risk management toolbox components include well-drafted contracts with favorable terms and conditions and clearly stated responsibilities and obligations of each party along with FMCSA compliance. All contracts should be reviewed by an attorney along with an insurance broker to ensure you have the right insurance coverage in place to meet your responsibilities and protect yourself from potential liability in the event of a loss.
Carrier selection is also a critical component in your toolbox. Today’s litigious environment can land you in court fighting a lawsuit should a loss occur. Be sure to have written procedures in place when selecting a carrier and that employees follow these procedures consistently. In addition, check all information you receive from the carrier, only use carriers with a “Satisfactory” rating, and assign a dedicated employee to onboard and collect certificates of insurance. There are services with which you can contract to perform these tasks, as well.
Also, develop a strong working knowledge of the FMCSA website and gain the ability to obtain licensing and insurance information for carriers and to check companies through the Safety and Fitness Electronics (SAFER) system at http://safer.fmcsa.dot.gov/.
With regard to the insurance products needed to protect you against liability risks and ensure regulatory compliance, be sure to work with an experienced broker in the transportation industry. An insurance broker serving the insurance needs of transportation and logistics providers will not only provide you the right mix of insurance solutions but will also assist you with claims management, safety training, and periodic risk reviews. Examples of the type of policies you may need include Contingent Cargo, Contingent Auto, Errors & Omissions, and Shippers Interest. Errors & Omissions insurance, for example, provides you with the legal defense and settlement (if awarded) per the policy terms in the event a customer files a claim against your company alleging damages as result of the services you provided. A Shippers Interest policy enables you to offer your clients insurance to protect against physical loss or damage and is a better option than solely relying on the carrier’s liability insurance.
Roanoke Trade, specialists in serving the insurance and risk management needs of transportation and logistics providers, is committed to helping our customers protect their businesses with services and products designed to address today’s risks. For more information about our solutions, please contact one of our Roanoke Trade professionals at 1-800-ROANOKE (800-762-6653).