Q. My broker tells me that our insurer will be seeking a considerable increase in our insurance rating because of a CONDITIONAL safety rating. This was based on an audit where we failed one component but marginally so. We run what we feel to be a very safety-conscious company, with tight controls etc. Do you think that insurance companies place too much emphasis on the CVOR?

A. For starters let me say that the CVOR record has become a very key record from an insurer’s perspective. And while I think this is a good thing there have been numerous companies that we have looked at because of the very situation you now find yourself in.

Personally I view CVOR as a benchmark and that’s it. I’ve seen plenty of companies with top-notch CVOR abstracts that in some cases have serious internal and operating problems of various descriptions. But they may have few or no accidents and a clean CVOR. So their insurer thinks they’re a great risk.

Examples have included:

* Carrier that has never been audited

* Rarely hits an inspection station because of locale and/or operation

* Is located near the border and runs extensively in the United States

On the other hand, there are an equal number I’ve seen where their CVOR doesn’t look great, for a number of possible reasons including:

* Small carrier with a recent serious accident and charges laid

* Failed audit (less than 55% in either driver or vehicle module)

* Recent run of bad luck

I don’t have an easy answer as to how to deal with an insurance company that places in some instances an undue emphasis on the CVOR abstract. Most have their own loss prevention personnel who do their own assessment. In many cases, the broker will retain a consultant to review their account and prepare a report that is submitted to the insurer. And hopefully if in fact the on-site reports are favourable, then the insurer may forego hike spikes because of the CVOR alone.

What I would like to see is a situation where insurance companies make a concerted effort to understand some of the pitfalls in relying too heavily on a CVOR as the chief indicator as to the safety performance status of the operator. There are too many operators paying too high insurance rates in my view because of a lack of understanding of the system.

Q. We recently underwent a facility audit, and charges were laid based on a number of varied accounting documents such as fuel and toll invoices. We offered up these records on consent, notwithstanding that they were not receipts issued to the driver. But what bothers me is that there are a number of charges laid where there is a singular receipt. Why is it that an auditor who has two records in front of him – a log and fuel record – ALWAYS accepts the time on the invoice as being accurate and the log apparently false?

A. Good question. For starters don’t get me going about the fact that the “receipts” viewed were not even issued to the driver. And I too question the laying of a charge based on a sole receipt. Consider at best that it is a piece of circumstantial evidence. It might be right, it might be wrong. Certainly (at least in your case) there was no evidence whatever that the Ministry made an attempt to verify the accuracy of the time noted on the invoice. At least they had in front of them a document (the driver log) that was certified by signature to be true and correct.

Think of what would be the case if this were a criminal investigation rather than a Provincial Offences matter. It would make it to Court in the first place.

Q. When we’re auditing our logs and we find situations where the log would be considered false, how can we legitimately correct the situation?

A. First of all as I have noted before, where a carrier finds a false log based on a receipt of some description, you take the approach with the driver that you will not reimburse receipts where they do not reasonably match the log. You are basing this of course on the fact that in front of you, there are two documents, one of them false, and that you cannot reasonably be expected to accept a false document. This approach generally gets their attention. With respect to correcting the log, have the driver re-do his or her log for that date. Mark on it “corrected by driver”, and staple the original one prepared to the new one. This will most likely mean that in the event of any subsequent audit you would not be charged with “did permit a log violation”.

Blair Gough is a consultant to the trucking industry and can be reached at 905-689-2727.