Agribusiness Auto Premiums Re-Evaluated

Agribusiness clients are aware of the high premiums that can be associated with their workers’ compensation, property, liability, and even employee health insurance, but automobile liability has historically been a low-cost, low-visibility insurance concern. That has now changed with the risk associated with catastrophic vehicle-related losses being on the radar of every underwriter. The loss ratios for farm and agriculture-related operations have spiked in recent years, and the lawyers/courts are treating farm operations just as they would treat a large construction or manufacturing company.

The chart below shows the loss trends for commercial auto in the last few years:

The root causes of the spiking claim costs include the following. Many of these can be mitigated with training and enforced policies:

• Poorly pre-screened driver
• Lack of driver-safety training
• More cars on the road
• Speeding/tailgating
• Distracted driving
• Driver fatigue
• Road rage
• Unsecured loads
• Poor vehicle maintenance
• Increased intervention by attorneys
• Larger shock verdicts and settlement

Insurance agents have a better chance of negotiating for better premiums and coverages on auto liability and workers’ compensation renewals when they can demonstrate to underwriters the steps you have taken to become a better-than-average risk. A well-designed safety program can achieve meaningful reductions in auto and employee injury claims.

Here are a few programs and training ideas that can easily be implemented:

• Driver-selection requirements
• Drug and alcohol testing protocols
• MVR review policies
• Defensive driving techniques
• Cell phone usage
• Vehicle inspection and maintenance
• Accident response and investigation procedures
• Post-loss claim mitigation strategies
• Driver incentive and discipline programs
• Mock DOT and OSHA audits

For expert guidance on reducing agribusiness auto liability premiums and implementing effective safety programs, contact our team today.