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Let’s talk insurance: Have a good recovery plan in place

A truck carrying junk plastic overturns and spills its load into a ditch. Without an accident recovery plan, the driver's employer didn't arrange to clear the accident site....

A truck carrying junk plastic overturns and spills its load into a ditch. Without an accident recovery plan, the driver’s employer didn’t arrange to clear the accident site.

That job went to local authorities, emergency personnel who contacted a local towing company. The local tower assigned not one, but two people to “guard” the freight of worthless junk and then impounded the damaged equipment for barely two days. The towing company’s charge for their services – nearly $30,000.

Surprised? Perhaps not. There are too many similar stories. Perhaps it’s happened to you. Accidents cost time and money – in the form of service disruptions, equipment and freight re-routing and fees for suppliers involved in the cleanup. Since accidents are virtually inevitable in long-haul trucking, the key question is how to minimize costs and disruptions while also preventing similar accidents in the future.

A clear plan of action: The best way to minimize accident costs is by having an accident recovery plan. The plan is a set of procedures that are followed after an accident to ensure the immediate safety and security of individuals, equipment and freight. The plan also provides a guideline for contacting suppliers that will clean up the scene, conduct a proper investigation and, if possible, deliver the freight.

Securing the accident scene: After an accident, the driver’s first responsibility is to make the area safe by checking the well-being of other involved parties and the condition of the load. The driver should also ensure that other motorists can use the roadway safely.

Contacting dispatch: The first call the driver normally makes is to dispatch, who can calm the driver if necessary and record details about the location and extent of the accident. Dispatch may also help contact emergency units (police, fire, ambulance).

Managing the accident response: Dispatch can then inform the company’s designated accident responder – the person who will centralize and “quarterback” the accident response. This staff member manages the involvement of various company departments (dispatch, sales, repair shop) and local service providers (towing companies, labour for freight cross stocking) so that all players respond efficiently and appropriately. The accident responder also contacts the insurance company to report the accident so that the insurer can help immediately as well.

Assessing the damage: A local claims adjuster may be assigned to the scene by the insurance company to conduct a thorough investigation and record key details of the event. As we advocate continually in this column, accidents should be reported directly and immediately to your insurance company. Calling your insurer first – especially when third-party individuals are involved – can make a dramatic difference in your insurer’s ability to gather evidence needed to defend you properly in a lawsuit. This could mean the difference between an accident costing hundreds of thousands of dollars – or millions.

Learning from the accident: Your management team should then analyze all available information to determine whether the accident could have been prevented. Ideally, the carrier conducts an accident review with the driver to assess the driver’s response and identify training needs, potential disciplinary action and opportunities to improve safety within the company.

The value of a good plan: As the opening example illustrates, carriers without an accident recovery plan could be taken for one expensive and unnecessary ride. However, with a proper plan, carriers can ensure business continuity, even in the most chaotic of situations. Consider the following: At 2:30 a.m., an expedited load travelling en route to a 7 p.m. delivery loses control and jackknifes into a rock face. By 8 a.m., adjusters have already conducted an investigation and collected statements from the drivers, the tractor involved in the accident has already been towed and workers are nearly finished cross-stocking the freight into another trailer. Put simply, the accident’s impact on the carrier’s operations was minimal in terms of cost and service delivery because the carrier had an effective plan in place.

The bottom line is that accidents always cost money. How much? According to FMCSA, the typical carrier would need to theoretically generate over $3.3 million of revenue to pay for the direct costs (damages, injuries) and indirect costs (lost sales, equipment depreciation) of a $100,000 accident. However, if the final cost of the same accident was only $50,000 (often due to a good accident recovery plan), then the carrier would only need to generate half, or $1.6 million, of revenue.

Whether the accident is a minor fender-bender or a collision causing serious injuries or death, a good recovery plan – one which can help make sure injuries are tended to immediately while also ensuring business continuity and keeping accident costs down – could be your most valuable asset. For all the things that are out of your control in the event of an accident, an organized response is one thing that’s definitely in your control.

– Mark J. Ram is president and CEO of Markel Insurance Company of Canada. Please send your questions, feedback and commentary about this column to For information about Markel visit

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