Transport and Transit
Transport and transit companies are subject to numerous rules, regulations and laws established by state and federal agencies. Companies that operate in only a single state are subject to only the regulations and statutes of that state. Operations conducted between states fall into the domain of interstate commerce and are subject to the United States Department of Transportation Federal Motor Carrier Safety Regulations. These regulations address the relationship between the motor carrier and the public.
Resource Risks for Transport and Transit Companies
Transport and transit companies usually bring large amounts of capital to their business in the form of terminals and vehicles in their fleet. This creates large property exposures that are best mitigated by the use of insurance. Our Insurance RFP© help companies to purchase insurance.
One of transport and transit companies largest exposure resource exposure is to fuel price fluctuations. One of the best way to mitigate this risk is to transfered contractually to the cargo owner in the form of fuel surcharges. A better way and to mitigate this risk at the same time of maintaining a competitive advantage is purchasing fuel contracts. Our Utility Risk Manager© can help the company to hedge its fuel and manage their fleet’s fuel usage.
Activity Risks for Transport and Transit Companies
Transport and transit companies perform a large number of activities in order to store and distribute products to its customers. These activities can be grouped into departments like purchasing, marketing, storage and distribution activities; or based on the company’s goals and objectives, into strategic (long term), operational (day-to-day), financial (money), and compliance (government) activities.
As a result of performing these activities, Transport and transit companies experience the possibility of a liability loss as a result of a specific legal claim or suit against the company. One way companies transfer (or mitigate) this risk is by Outsourcing the activity (or a set of activities). Our Activity-Based ERM© can help companies to decide if a particular activity is better outsourced (subcontracted) or kept in-house, when the cost savings can not offset the increase in company risk. If the company decides to outsource, the Contractual RM© will help manage the risk of subcontracting and outsourcing.
In addition to using contract risk transfer, companies can mitigate these liability exposures by the purchase of insurance products like Workers Compensation, Auto Liability Insurance, Employers Liability insurance, Commercial General Liability insurance, Motor Truck Cargo Legal Liability and others. (Insurance RFP©).
Another large exposure for Transport and transit companies is to losses from business interruption. In addition to purchasing insurance , the company will need to prepare a Business Continuity Plan (BCP) explaining how the company would respond to an emergency (Emergency Response Plan-ERP) and how would recover from it (Continuity of Operations-COOP). Our Insight BCP© help companies to plan for and respond to emergencies.
Product and Service Risks for Transport and Transit Companies
Due to strict and absolute liability laws, regardless of how safe transport and transit companies perform their activities, there is always the possibility that the company may become legally obligated to pay damages.
Product or Service risks for transport and transit companies have less to do with how safe the product (or person) is transported and more with what is being transported. Is the company transporting wood logs, radioactive material or school children?
Insurance is the best way to transfer risk of events that are totally unpredictable. (Insurance RFP©). In addition, our Activity-Based ERM© can help companies to identify and mitigate this product and service related exposures.