Being audit ready every day: your insurer will thank you

October 4, 2023

Roamin' With Rick is an ongoing travel series that covers industry news, people and insights from around the trucking world as he travels to industry events across North America. In this installment, Rick visited the Fleet Safety Council in Ontario for a panel discussion on what insurers look for when they are considering working with a carrier.

Rick Duchalski is a Communications Specialist with CarriersEdge.

At a recent Fleet Safety Council meeting in Toronto, Lisa Arseneau of Staebler Insurance sat down with a panel of insurance experts to share some industry insights. Evelyn Cartmill of AIG, Belinda Edison of Old Republic and David Goruk of Northbridge pulled back the curtain on what they look for when evaluating potential clients. Going into a carrier for an initial safety meeting and/or pre-quote, insurers find a whole range of scenarios, from surprisingly well-organized to absolute chaos. But among all of the (sometimes shocking) stories that they shared, one theme bubbled up from all of them: "Help us help you"—they're not there for enforcement, they're there to get you to compliance and beyond. As Lisa Arseneau pointed out, "What we would love to see is a client that is ARE: Audit Ready Every day". But they can't help a carrier get there without some preparation, care and diligence on the part of the potential client.

My dog ate my safety scores

During a safety meeting, insurance providers will conduct a risk assessment of a carrier as a potential insurance client. The point of this meeting is to get a sense of how the business is run: adherence to safety regulations, track record, and overall commitment to safety. But this isn't just a simple paperwork check-up. As Evelyn Cartmill noted, "We are also looking to get a sense of the culture from the top down, to see how seriously they take it". If insurers get to the meeting and the carrier's boss doesn't even bother to show up for it, that sends a signal. And if the 'filing' system is little more than a chaotic pile of papers on a side table (or if the training report was 'accidentally' left at home), you can make a pretty good assumption about their organization in other areas, too. In fact, here are some of the major cues and clues that insurers look for to gauge a carrier's commitment to safety:

1. Consistency of information: A carrier says that they monitor their safety reports weekly, but when asked about a specific recent event cited on it, why are they taken by surprise? Insurers can see your full SMS, and they'll compare the information initially provided by the carrier with the actual situation. If there are inconsistencies, such as a violation that the carrier fails to mention despite claiming to review their records regularly, it raises concerns. (Hint: although they are not there to play 'gotcha', your insurance partner tends not to ask questions they don't already know the answer to, so complete honesty is your best way forward.)
2. Involvement of key players: They are going to assess whether key personnel, including owners, actively participate in the safety meeting. They're looking for buy-in on safety practices from the top management while evaluating the overall safety culture within the organization.
3. Genuine belief in policies: If the carrier has well-documented safety policies, insurers assess whether the carrier truly believes in and follows those policies or if they are merely for show. They want to see if the carrier's commitment to safety is deeply ingrained in their organizational culture.
4. Transparency through reporting: Insurers have access to the carrier's safety profile and they are going to look you up before you ever even meet. While talking about your profile, insurers will use that conversation to understand the carrier's processes as well as see if you are willing to have an honest discussion rather than playing a blame game.

Going from barely compliant to ARE

All of the panelists agreed that once they have taken you on as a client, what they are really looking for is 'defendability': if you end up needing their help, what sorts of tools, proof and track record do you have that can help them go to bat for you? This is exactly the place where you should start thinking about being ARE (Audit Ready Every day). If an audit were to happen at a moment's notice, this kind of carrier would be ready. Are all your reports accessible and easy to navigate? Are you tracking all of the training your team is doing? How quickly could you gather all that information?

This doesn't mean that you get to work every day, stressed about getting everything organized in case you have an audit that day. Rather, it's about having the right processes in place so that you don't have to be stressed when an audit does happen (plus, you'll be enjoying all the net benefits of being organized in the first place).

So how do you get there? The panelists described a recipe they called "own it, show it, grow it":

1. Own it
   Do you have safety and reporting problems, even serious ones? Getting to a place where you are taking personal responsibility for those problems is the first critical step. If you're still playing the blame game it's going to make the rest of the process very difficult.
2. Show it
   Once you've owned your problems, the 'show it' step is about tracking everything you are doing to fix them. Your insurance partner will help you develop a plan for solving your problems, but then you have to commit to tracking and reporting everything you are doing along the path to correcting it. This will allow both of you to see what's working and what isn't and let you make corrections along the way.
3. Grow it
   The "grow it" step is about taking the successes of your new processes and pushing them into new areas of training and safety practices beyond simple compliance.

Being Audit Ready Every day is not just about producing reports, because it's not just about paper audits—it's about an attitude and culture audit too. And the kind of safety culture that insurers look for in their clients (i.e., the ones who are defendable) includes having the right processes and tools in place to keep people safe and make them effective in their jobs.