Insurance Insights: An Insurance Update

January/February 2003

Welcome to the first installment of this new department. Each issue, executives from RecycleGuardsm—ISRI’s property/casualty insurance program—will provide important and timely insurance and risk-management information for scrap professionals. We hope you enjoy and benefit from this addition.
   The State of the Insurance Industry … and RecycleGuard: The bad news is that insurance companies continue to lose money based on increased reserves from previous losses (particularly asbestos claims) as well as claims from recent catastrophic events such as floods in Europe and rain and tornadoes in the United States. As losses continue to mount, the insurance capacity in the marketplace shrinks, resulting in fewer choices and higher prices. There doesn’t appear to be an immediate end in sight.
   The good news is that ISRI, in conjunction with RecycleGuard, continues to provide insurance products to the majority of members, using financially strong insurance carriers. RecycleGuard, the carriers, and ReMA are working together to try to improve loss-control and risk-management tools to hopefully address losses. Not all industry groups are as fortunate.
   The success of the RecycleGuard program has been phenomenal. The program currently has more than 1,000 policyholders in the United States and Canada with premiums totaling around $70 million. The beauty of the program is that it gives you the flexibility to choose the agent you wish to use. The program allows you to decide.
   RecycleGuard has about a 20-person staff, all of whom are dedicated to underwriting, quoting, and issuing policies for recyclers. In addition, auto, property, and liability claims are handled by a third-party administrator from a centralized facility in Pittsburgh. That facility also has about 20 adjusters dedicated to handling claims for recyclers. This allows for sharing of expertise and ensures a consistent approach to claims handling.
   Automobile Insurance Trends: Automobile losses continue to be the most frequent and most costly losses in the Recycle-Guard program. The four major causes of loss were rear-end accidents, roll-overs, collision with fixed objects, and foreign objects thrown from vehicles. While these types of losses aren’t surprising given the number of trucks operated by ReMA insureds and the commodities they transport, there are steps you can take to prevent or minimize the number of accidents and the dollars associated with such accidents. Here are some tips to consider:
• Make it your company philosophy and practice to provide orientation to all new drivers before they’re allowed to drive for you.
• Set consequences for employees who disregard company policies and expectations.
• Follow a driver periodically to see how he operates and stop to correct him, if necessary.
• Inspect vehicles both before and after trips, then document these inspections.
• Develop and enforce effective loading and unloading programs, including strict adherence to vehicle weight standards.
• Sign up for the Internet Defensive Driving Program, provided free to RecycleGuard policyholders. The program is flexible in that it allows your drivers to complete the course over a period of time that is convenient for you and them. All you need is a PC and a password, which you can obtain by contacting Shannon White at RecycleGuard at 888/225-4725.
• Sign up to use the 1-800-How’s My Driving program, again offered free to RecycleGuard policyholders.
Here, also, are some timely driving tips to help your drivers on the road:
• Driving Conditions—Your drivers usually can’t choose the weather they must drive in, but being prepared for conditions in advance can help them plan their travel accordingly. Visit our Web site at www.recycleguard.com for a full description of common weather conditions. Click on “Driver’s Guide to Understanding Weather Conditions.”
• Cell-Phone Use—The National Safety Council continues to support the position that, though electronic devices such as cell phones provide extraordinary benefits to public safety and productivity, a driver’s first responsibility is the safe operation of the vehicle and the best practice is to not use electronic devices while driving. The council recommends that employers assess whether to allow each employee to use such devices while driving and, if so, what restrictions should be followed. Quite a few studies have looked at the accident rates due to the use of cell phones, as well as the economic impact that would be borne by society if cell-phone use was banned in all states. Currently, most states don’t have any regulations limiting the use of cell phones while driving. There’s a high probability that will change, however. As cell-phone use continues to grow and more accident studies are conducted, more regulation will surely follow. 

—Monica McNally, senior vice president of RecycleGuard/Willis of New Hampshire Inc. (Portsmouth, N.H.)•

Welcome to the first installment of this new department. Each issue, executives from RecycleGuardsm—ISRI’s property/casualty insurance program—will provide important and timely insurance and risk-management information for scrap professionals. We hope you enjoy and benefit from this addition.