Carrier Policies Too Strict or Simple Can Hurt Insurance and Litigation

Carrier Policies Too Strict or Simple Can Hurt Insurance and Litigation

Did you know insurance providers notice how your company policies are written and followed by management?

Your fleet’s company policies are your shield against litigation when accidents happen.

It is the job of your fleet’s safety compliance officer to help drivers and employees to follow these policies and help update them as state and federal regulations change.

The problem with policies is that if they are too strict or too simple, it can hurt your company.

So, what is the right balance? Let’s find out.

Do you have a Safety Manager or Safety Director?

If so, does that Safety Manager or Safety Director even have time to manage all of their duties?

Most carriers start looking for a full-time Safety Manager when they have 20-30 drivers. However, their day-to-day tasks often bury important duties if there are over 50 drivers.

If policies are the shield for your company, it is the Safety Manager who makes sure that shield is strong or they end up causing cracks to form.

It is their job to build safe operations, screen new and current drivers, decide on adding or using safety technology, and grow the company’s safety culture. They often also help with insurance renewals, litigation, and real-time driver risk management.

This is why we highly recommend a third-party compliance company to manage parts of their duties so they can focus on managing drivers closely.

This can include pulling basic tasks from drug testing management, policy updates, mock DOT audits, pull important PSP reports, DQ file management, and more.

How Policies Affect Safety and Risk Management

According to Andrew Walker, Safety Director of Shipley Energy, during our podcast, “When you are talking about risk management and litigation, as important as regulations are your company policies, because if you don’t follow your company policies, you make yourself negligent.”

“The civil standard for negligence is ‘known or should have known’,” Walker said. “Did you know or should have known this driver is a problem? If you should have known, you will be negligent.”

There is an art to writing policies. “Our policies have to be clear and use very little ‘wills’ and a whole lot of ‘may’,” said Walker. For example, “There is very little ‘We will terminate you if…’ and more ‘We may terminate you if…’.

Let’s look at a hiring example.

Let’s say you hire a 21-year-old driver (against your company policy that says 22 or older) and five years later he is in an accident that killed somebody. A good plaintiff attorney will look at your policy and say you should never have hired him in the first place. This leaves the company negligent because they “should have known” that this risk was avoidable according to the policy.

In the end, you have to follow your own rules.

So, what are the most common issues with policies?

  1. They follow minimum requirements
  2. They are too lengthy
  3. Rules are too strict
  4. State or federal rules changed and policies were never updated

Issues arise with minimum policy requirements when insurers measure your fleet risk. If they know “everyone is doing this” process or using a safety technology, they expect you to have these bare minimums because litigation attorneys will grill you in a deposition.

To prevent the overly lengthy and strict policies, Safety Managers should have policies that cover general rules along with an established and documented process on how the company handles policy violations as they come up.

For example, let’s say you have a driver with 1 million accident-free miles and they were just involved in a serious accident. If you have a strict policy to terminate the driver in this situation and you don’t, you are at risk of being negligent. Even if this was your best driver.

The policy should use ‘may terminate’ and then establish a driver training program to help prove a strategic approach to preventing the mistake in the future.

By having a process in place to evaluate violations, you can determine the appropriate action that should take place.

This is the same for your fleet safety technology data. If you have the tools, you need to have a comprehensive data-management policy and process in place to prevent future risk if the data shows any red flags.

CNS has a Safety Director level Proactive Safety Management (PSM) Program

At times, Safety Directors are asked to wear too many hats leading to communication breakdown, which in turn can have negative effects on your company.

Our PSM Safety Director Program is our most comprehensive program and is meant to operate as your company’s off-site Safety Director or to assist your current safety personnel.

Our team of DOT Compliance Specialists will proactively manage and monitor CSA Scores, Insurance Claims and audits to improve your company’s bottom line.

We assist in creating policies to protect your company and your drivers from potential risk exposures as well as manage your:

  • Drug testing requirements
  • Driver Qualification Files
  • ELD Management
  • Driver Coaching
  • Licensing requirements
  • and more

Managing everything on your own is overwhelming and missing any little detail can lead to audits, fines and other negative consequences.

If you are ready to get started or would just like more information on how you can start being more proactive with your compliance, please reach out to CNS compliance team at 888.260.9448 or

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