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INSURANCE AND RISK MANAGEMENT


Mitigating Insurance Costs Through a Strong Corporate Culture


By Brooke Skeen and Robert Garese, Excel Bonds and Insurance Services


C


onstruction in California has been picking up in the last 18 months, and industry projec-


tions show that growth will continue in the years to come. With growth, however, come challenges that many companies may not have needed to address or think about in recent years. While the expansion of a company


and the industry in general is a great thing, it does open companies up to numerous risks through that wider exposure. Insurance, as a compulsory aspect of doing business, is typically an afterthought for contractors. However, having a plan early on and developing a corporate culture focused on safety and risk management is the best way to control and reduce what is one of a company’s biggest expenditures. Te mindset does not have to stem from a strictly financial standpoint; in fact, one of the best ways to cultivate a culture of excellence is by cultivating a strong sense of company pride. Even as premiums/rates on most


lines of insurance are expected to remain relatively flat in the upcoming year, auto insurance has been seeing higher than expected losses, despite the fact that it is one of the more control- lable risks. Jeremy Clarkson, of Top Gear fame, has said in a very tongue- in-cheek manner that the fastest car in existence is a rental car. To some extent that is true – at least in the aspect of how people drive them.


Company Vehicles Represent You


When developing an internal


culture of company pride, remember that anything with the company name on it should always be the best repre- sentation of what your company has to offer. Cultivating the mentality that the company truck, with the name and


14 March/April 2017


logo plastered on the side, is not simply “someone else’s car” but an adver- tisement of professionalism and pride, can drastically alter a driver’s approach to getting to and from the job site. While employees may still not treat


it as gently as a brand-new Ferrari (or Tesla, depending on your aspirations), incorporating the idea that the quality of the work begins not just at the job site but any time you don the company name can lead to much more respect and care for company vehicles and the liabilities their existence represents to


Having a plan early on and developing a corporate culture focused on safety and risk management is the best way to control and reduce what is one of a company’s biggest expenditures – insurance.


employers. Employees driving company vehicles should always represent you, their employer in the best possible light. All this being said, a great attitude


does not a good driver make – but there are some ways to help control the quality of your drivers. Te most basic one is checking MVRs when hiring new employees. As I mentioned earlier, people’s driving habits can change when they are not the owner of the vehicle, so the DMV Pull Notice (EPN) program can help alert you when one of your drivers has signif- icant changes to their driving record.


Set Clear Guidelines Clear and concise guidelines for use


of company vehicles should be estab- lished as well, with these guidelines taking into account your company’s auto policy (especially when it comes to personal use). Just remember that if you see your company truck parked outside the local watering hole, off the clock or not, it’s your company’s insurance that is going to be first to respond if anything were to happen upon an attempt to drive home. While you can’t keep an eye on


every single company vehicle that an employee is using, there are some great technologies now that can help gather information. Tracking software can provide data not only on employee driving habits (GPS locations, exceeding speed limits, use on weekends, etc.) but also route planning and even maintenance to allow you to have more control over your fleet.


Establish a ‘Safety First’ Mindset


Workers’ compensation is another


major insurance cost that can be mitigated by company culture. “Safety is the highest priority” is a saying we are all quite familiar with, but the opportunity to develop a “safety first” mindset needs to be ingrained early and often, not just in a meeting somewhere down the line. Construction employment reaching


its highest level in eight years and the number of construction projects increasing translates to lots of new employees out there. Taking care to hire the right people is important, but taking the time to invest in and properly train these employees is paramount. While they may be trained in a mechanical or trade skill sense, proper integration into company culture is an investment that will pay off in the years to come. Instill in your employees the sense


that your company accepts only the highest standards when it comes to


California Constructor


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