Opinion: Trucking Work-Injury Programs

Vice President, Underwriting

Ameriplan Benefit Corp.

This Opinion piece appears in the Nov. 8 print edition of Transport Topics. Click here to subscribe today.

Earlier this year, American Trucking Associations released a very upbeat forecast for U.S. freight transportation. The volume of freight transported is expected to grow steadily over the next decade, and the trucking industry’s share of the freight shipped is projected to be nearly 82% of freight tonnage by revenue.

That’s good news, but motor carriers will be challenged to keep pace with this growth — and finding enough drivers to meet demand will be particularly difficult. The search for drivers will be complicated by trucking management’s need to be mindful of the Federal Motor Carrier Safety Administration’s new Compliance, Safety and Accountability initiative — henceforth to be known simply as CSA — with its focus on driver quality at a time when driver quantity already is an issue. Management also will be coping with an aging workforce and a shortage of young new drivers entering the profession.

Many trucking companies will choose to expand their workforce by contracting with owner-operators and independent drivers. Fortunately for everyone concerned, the owner-operator business model is alive, well and very attractive to companies looking to minimize capital investment and achieve the flexibility needed to respond to a fluctuating demand for services. In many cases, motor carriers have company drivers, as well as contracts with fleets and individual owner-operators.

Regardless of how a trucking company goes about building its driver workforce, one of the key responsibilities of risk managers and safety directors is to put an effective work-injury program in place for drivers and other employees. The focus first must be on finding the proper work-injury coverage for their driver force. Next, with the decline in available replacement drivers, it also will be important for each trucking company to develop an aggressive return-to-work plan when injuries do occur.

It is clear that statutory workers’ compensation is the appropriate and required coverage for employee drivers, but the same can’t be said for small fleets and owner-operators. In that situation, occupational accident insurance often is an acceptable — and much more affordable — option for drivers who are not company employees.

However, determining proper work-injury insurance protection can be difficult because of inconsistent state regulation with respect to worker classification.

Typically, trucking companies will purchase contingent liability coverage, which affords protection against an unfavorable court ruling. Nevertheless, it is essential that the person who manages a carrier’s work-injury program select the right partner to insure and administer it.

The following is a partial “to do” list for ensuring a successful work-injury program.

• Choose legal representation that has demonstrated expertise in dealing with the trucking industry.

• Be knowledgeable of state regulations regarding employee status for purposes of workers’ compensation insurance. Choose a provider that can give guidance in this area. A good way to start is to refer to the Analysis of Workers’ Compensation Laws reference guide, which is published each year by the U.S. Chamber of Commerce.

• Recognize that workers’ compensation coverage is likely to be required for individual fleets leased to you, as well as for your company employees.

• Identify a work-injury provider that is a leading writer of both workers’ compensation and occupational accident insurance.

• Choose an experienced provider with many years of experience servicing the trucking industry.

• Make sure the provider has an A.M. Best rating of “A” or better.

• Choose the most cost-effective coverage that complies with applicable state regulations.

• Select an occupational accident plan with broad coverage. The plan should cover driver activities that comply with federal and/or state laws or satisfy contractual obligations of the motor carrier. A contingent liability policy should be part of the package and provide legal defense costs without limitation.

• Avoid programs with state exclusions; the work-injury protection should be available in all states.

• Be aware that an experienced claims staff is critical when adjudicating occupational accident claims because it will (1) minimize the frequency of workers’ compensation allegations and (2) increase the likelihood of drivers returning to work, thereby reducing turnover and associated recruiting costs.

• Make sure the work-injury partner you choose offers a full array of managed-care programs for occupational accident and workers’ compensation. Having a strong network of preferred provider organization (PPO) providers is essential for keeping medical costs down and achieving optimum claim service results.

• Look for a firm with dedicated claims personnel who are accessible 24 hours a day, seven days a week, 52 weeks a year — and who aggressively seek to mitigate costs via subrogation whenever it’s cost-effective to do so.

Putting together an effective work-injury program is an important cost consideration likely to have a positive effect on any trucking company’s bottom line. It is important to look ahead and do your homework before implementation.

Since 1979, Ameriplan Benefit Corp., Knoxville, Tenn., has provided insurance and consulting services for the trucking industry in general and longhaul carriers in particular.