Trucking recommendations emerge in report on ‘hard market’ for insurance

John G Smith

Insurance companies have been paying out more in trucking-related claims than they collect in premiums. But a new insurance industry report makes a series of recommendations to help address rising costs and the struggles to secure insurance in the midst of today’s “hard market”.

“Between 2015 and 2019, in the trucking sector, commercial insurers paid out $1.04, $1.12 and $1.06 in Ontario, Alberta and Atlantic Canada, respectively, for every $1 earned in premiums on a per vehicle basis,” notes the final report on a national commercial insurance task force, issued by the Insurance Bureau of Canada.

(Photo: istock)

“In some years, the losses were much higher, with insurers paying more than $1.25. Losses exceeding premiums for a consecutive number of years is unsustainable. These unsustainable losses have led to necessary premium increases.”

Some private insurers have been re-evaluating their underwriting decisions in the face of large liability settlements in the U.S., and Canadian losses such as the Saskatchewan truck-bus crash that killed and injured members of the Humboldt Broncos hockey team, the report notes.

The trucking industry isn’t the only one to face challenges. The task force looked at issues that are driving costs higher in the transportation, condominium, hospitality, and non-profit sectors.

“There is no one silver bullet that will solve the challenges facing the Canadian commercial insurance market,” writes IBC president and CEO Don Forgeron. “Over the last five years, commercial insurance claims have become more frequent and costlier, and this has caused insurers to re-evaluate how much risk they are prepared to support.”

CTA guidance

The trucking-specific insights came through meetings with the Canadian Trucking Alliance (CTA) and related associations.

CTA representatives raised several issues during an October 2020 roundtable, including struggles that young and new drivers face when obtaining insurance, and the lack of available insurance in the excess liability or umbrella market.

Included in the list of recommendations is a call for incentives for fleets that deploy safety technology such as collision avoidance systems, but also the need to reduce insurance fraud within the trucking industry.

Facility Association – an insurer of last resort in many provinces – recently found that some trucking businesses falsely claimed head offices in Atlantic Canada just to secure lower premiums. It has since drawn documentation requirements in line with those used by private insurers.

Insurers are also being encouraged to share information on their current rating systems, including the details on how a carrier’s performance contributes to premiums. And provincial governments are being called on to implement a database to verify insurance when issuing or renewing plates.

Fighting fraud

“The recommendations put forward in IBC’s report with respect to trucking reflect many of the key issues our members are focused on addressing.  We support and applaud IBC and the insurance sector for taking the initiative to tackle issues that can be solved through partnership with our membership,” said CTA president Stephen Laskowski.

“One of the more topical recommendations deals with insurance fraud in our sector. We believe there is a strong correlation between fraud and the Driver Inc. problem, which is yet another reason for all levels of government to make the enforcement of Driver Inc. a top priority.”

Driver Inc. refers to businesses that misclassify employees as independent contractors to avoid compliance costs. 

CTA also says it plans to raise issues about indemnification clauses in shipper contracts and addressing loss-transfer provisions where necessary.

“By partnering with the trucking industry, IBC and the insurance sector can move forward on issues that will make a real difference from the consumer’s perspective, further improve road safety, continue to level the playing field and significantly make the trucking industry more attractive for younger generations looking for an earlier start to their professional driving career,” said Geoff Wood, CTA’s senior vice-president – policy.

Forgeron said his association will “play a lead role in advocating for the implementation of the recommendations.”

“There is no one silver bullet that will solve the challenges facing the Canadian commercial insurance market,” he added.

John G Smith

John G. Smith is the editorial director of Newcom Media's trucking and supply chain publications -- including Today's Trucking, trucknews.com, TruckTech, Transport Routier, Inside Logistics, Solid Waste & Recycling, and Road Today. The award-winning journalist has covered the trucking industry since 1995.

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  • We need a Ont government option for all fleets of under 50 units. We need a overhaul of treatment of truck drivers when get sick or hurt.
    Many truck drivers got hurt and are disabled. I see many with gout and black fungus from a lack of medical care and proper food. The Ford gov and the Fed gov need a better solution to stop so many people including truck drivers loosing. their health and lives.

  • There’s a lot of bad truck drivers somehow getting through these “truck driver schools”. The mistakes they’re making out on the road is costing us dearly, but no one wants to talk about it.

    • I drive an inter-city bus throughout Northwestern Ont and there’s one trucking company who’s drivers are driving like they’re scared to be on the road. For example, their drivers are constantly hitting the brakes for no apparent reason (like a shadow across the road, an oncoming vehicle, etc). They probably only hire newly licensed drivers who probably get paid less than experienced drivers.
      Sometime I’ll mention to a passenger… see that truck on the horizon, it’s probably an ABC truck. I’m usually correct just based on watching how they’re driving.

      We have single lane highways around here and another problem I see everyday are drivers from Alberta. They go slow when it’s not possible to pass then speed up when a passing lane opens up to block others from passing. I was behind one guy like that yesterday, speed limit was 90, he was doing between 80 and 90, passing lane opens up, I move to pass and he sped up to 110. Then slowed down at the end of the passing lane.
      It’s not just Alberta truck drivers that behave like this. Alberta drivers with pickup trucks (pulling campers) behave the same way.

      Arrgghh… end of rant

    • You are 100 percent right. Many truck drivers need to go with a more experienced truck for a minimum of 500 hours with the other experienced truck driver in the passenger seat. I always say in the passenger seat with a new driver even if half asleep sometimes on rush loads.

  • My insurance rate has gone from $25000 a year to $93000 a year. Most of our business is 200 km from base. I’m curious as to what’s going on…We have a church based liability insurance program that would cost me less than $ 2000 per yr in the area…lot of my competitors use it…to bad I’m a bad boy and don’t qualify