Threats facing the haulage industry

Our transport insurance experts have taken a look at the newest legislation, industry trends and latest news stories in the world of haulage and commercial transport

Latest news

New Corporate Manslaughter prosecutions

February 2013 has seen two new Corporate Manslaughter prosecutions hit the headlines bringing the total number of prosecutions since the legislation was introduced on the 6th April 2008 to six.

MNS Mining Ltd is being prosecuted under the Act following the death of four miners in September 2011. The company is facing four charges of Corporate Manslaughter and the mine manager is himself facing four charges of gross-negligence manslaughter.

A water sports club in Middlesex is the sixth company to face prosecution following the death of a young girl in 2010. The company has also been charged under Section 3 of the Health and Safety at Work Act and one of the directors has been personally charged under Section 37 of the HSWA.

Given there have only been six prosecutions to date under the Corporate Manslaughter Act, despite the two most recent prosecutions, one could argue that prosecutions under this Act are still rare. That said, given the potential penalties under the Corporate Manslaughter Act - as well as under the Health and Safety at Work Act - and the fact that individual directors can, despite the new Act, still be personally charged with gross-negligence manslaughter, the need to take health and safety issues very seriously indeed has never been clearer.

Goods-in-transit security

Transit losses in the haulage industry through theft and damage have increased considerably over the last few years and insurance premiums have risen as a result. Reducing your exposure to transit losses should improve your claims experience. And as well as cutting the hassle of dealing with claims, premium savings are likely to be enjoyed.

Driver instructions

Losses will often occur through no fault of the haulier. But your liability for such losses can be hard to avoid unless documentation is completed correctly. To minimise this risk, the instructions you give to your drivers about documentation should include particular reference to three key areas:

  • Load collection

  • Stowage and securing of consignments

  • Delivery of load

Depot and vehicle security

Every business is different and the risks they face need to be individually assessed. Careful consideration needs to be given in particular to the security issues relating to four key areas:

  • Depots

  • Vehicles

  • Trailers

  • Customers' goods

Recruiting staff

Some transit insurance policies state that reasonable care must be taken when employing staff to ensure that new recruits are who they say they are and are of good character. Others may specifically refer to obtaining references.

The following steps should always be followed when recruiting new staff, irrespective of their role:

  • A senior person in the business should always conduct interviews

  • Application forms should always be properly completed and retained on individual personnel files

  • References should always be obtained and / or checks made through an appropriate pre-employment security vetting agency.

By making sure sound procedures have been introduced to minimise the risk of transit losses, not only do you cut the risk of claims; more importantly still, you protect your reputation with your customers.

Loss prevention Q & A

Agency Driver Issues

For some transport companies, agency drivers are a vital component of a flexible workforce. As with any workforce, some are excellent, others are less so. The question some hauliers ask is what can be done to minimise the risks associated with deploying agency drivers. Here's a couple of Q & As that may help.

  • There are lots of driver agencies 'out there' and the drivers some supply seem to be better than others. Do you have any advice about how to pick a good agency?

     

  • We recommend that transport companies only use the services of driver agencies that are Recruitment and Employment Confederation (REC) members and who follow the code of practice drawn up by the REC Drivers Group in conjunction with the RHA and FTA. This code of practice places obligations on both the driver agency and the firm that's engaging the services provided by the driver agency.

    From the haulier's perspective, key benefits of using drivers supplied by a REC Drivers Group member include knowing that the driver agency has (i) made every reasonable effort to ensure that drivers comply with relevant legislation, in particular the drivers' hours and tachograph rules, (ii) has taken up relevant occupational references covering the previous two year period of employment, particularly checking periods of unemployment so far as practicable, (iii) has checked drivers' licences, regularly re-checks them and, if a driver does no work for the agency for a period of more than three months, carries out further licence checks and (iv) keeps appropriate records of drivers to be supplied, including past experience, qualifications and references.

    What should not be overlooked is the need for the transport operator employing an agency driver to still follow the relevant induction procedures that they would normally adhere to when taking on a new full-time driver of their own. If an agency driver is not properly briefed and made fully aware of what is expected of him or her before getting in a cab, the operator should not be surprised when the unexpected happens.

  • We use quite a lot of agency drivers to give us the flexibility our business needs. As a result, our claims experience is quite significantly affected by claims involving those agency drivers. Is there any way we can hold the recruitment agency responsible for damage caused to our trucks by the negligent acts of drivers that they supply?

  • A majority of driver recruitment agencies can provide what is known as 'drivers' negligence insurance', usually as an extension to their public liability cover, to protect their customers against claims for accidental damage to trucks caused by the negligent acts of drivers they supply.

    Drivers' negligence cover is only provided if the transport company has made the agency contractually responsible for such damage. This is in accordance with the REC/FTA/RHA Joint Code of Practice for Agency Drivers which states that "should REC members offer drivers' negligence or fidelity-bonding, this must be set out in a contractual document which must be signed by both parties before the assignment begins".

    Drivers' negligence cover is typically limited to either £5,000 or £10,000 any one event and to between perhaps £30,000 and £50,000 any one period of insurance. An excess of perhaps £500 or £750 may be typical. Depending on what the contract says, some agencies may themselves offer to pay the excess in the event of one of their drivers causing damage to a customer's truck.

    Care needs to be taken to ensure that the drivers' negligence cover does not restrict the size of vehicles being driven, nor the territorial limits which may, for example, need to cater for trucks being driven abroad.

    Finally, transport companies hiring agency drivers from agencies that provide drivers' negligence cover still need to arrange motor insurance in the normal way given drivers' negligence cover excludes injury to third parties and damage to third party property - as well as only providing limited cover for truck damage (see above).

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