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Recently, a truck loader operator for a lumberyard had a bucket of mulch and was driving forward with obstructed vision. He struck and killed a coworker, only realizing what happened when he saw the employee’s high-visibility vest on the ground while exiting the yard.
With more trucks on the road than ever before, accidents are rising. Research from the Federal Motor Carrier Safety Administration shows that fatal accidents involving large trucks have consistently increased since 2008.
In 2021, the number of casualties due to large truck accidents was 50% higher than in 2009. The same holds true for forklifts. According to statistics from OSHA, the number of forklift-related deaths has increased nearly 30% over the last decade.
Too often in a high severity industry like lumber, where employees and pedestrians are moving around the yard and market conditions place pressure on entire operations, safety can sometimes fall to the wayside. Our industry is seeing tragic, preventable incidents involving trucks, forklifts and loaders grow in frequency and severity. Beyond the emotional toll, losses often reach seven figures and can threaten the long-term viability of small and midsized businesses.
To prevent these incidents, however, business owners and operators need to know how to mitigate their risk. Fortunately, insurance producers can play an essential role in assessing insureds’ risks, as well as the potential outcomes and factors impacting their insurance costs.
Rising claim costs
In addition to the tragic loss of life that incidents involving trucks, forklifts and loaders can cause, such incidents can leave business owners to navigate complex claims or on the hook for repair costs or settlement fees beyond the limits of their insurance coverage. Safety and incident prevention strategies can save both lives and the viability of an entire business.
Producers should talk to their insureds about key drivers in rising claims costs, so they can better understand their coverage needs. For example, producers should talk to their insureds about:
Inflation in repair and replacement costs: A customer who purchased a semi-truck for $100,000 a decade ago would now pay nearly double for a comparable model. Even basic repairs, such as headlight assembly, have risen from a few hundred dollars to a $1500-$3000 job.
Social inflation and litigation funding: Verdicts in bodily injury cases have risen sharply due to outside investment groups funding lawsuits that otherwise may have settled early. These cases drive up settlement values dramatically, increasing the cost involved for all parties.
Medical inflation: The expense of restoring mobility after a crushing or amputation injury has been on the rise. A few years ago, such an injury may have cost $600,000, whereas today, it could cost over $1 million. Educating policyholders on these trends and connecting their coverage limits with these costly potential outcomes can help clients understand why risk mitigation is increasingly critical, as well as the urgency in putting a plan in place now.
Creating a culture of safety
For producers serving clients in equipment-intensive industries such as lumber, a culture of risk mitigation and safety is essential. Advising insureds on the right investments and practices to build this culture can reduce the likelihood and severity of a loss. These could include:
Telematics and GPS monitoring: These tools can track harsh braking, speeding and sharp turns and provide video footage for both driver coaching and claim defense. Fleet managers can use this data to reward operators who are prioritizing safe driving.
Recommend the right technology: New trucks have a range of technology available, including adaptive cruising, blind spot monitoring, automatic emergency braking and air disc brakes. For example, with the use of air disc brakes, drivers can shorten stopping distances by 20%.
Strengthen driver screening and monitoring: Business owners need to carefully screen and monitor drivers to ensure they are qualified and dedicated to driving safely. Continuous MVR monitoring can alert employers immediately if a CDL if suspended, preventing unlicensed drivers from operating vehicles.
This data can also be useful during annual reviews, as fleet managers can access detailed driver data to ensure they are still qualified to operate a company vehicle.
Pay attention to the details: Maintenance and training are essential. Require annual retraining, including visibility awareness, pedestrian right-of-way protocols, high-visibility vests for bystanders and more. Supervisors should also enforce daily inspection checklists and address unsafe behavior on the spot. Operators should complete daily pre-use inspections and report leaks or brake issues immediately to ensure equipment is functional.
Separate people and machinery: Consider recommending pedestrian-free zones in high-traffic areas. When employees enter a loading zone, they must announce their presence over the radio and all machinery must stop until the person exits and confirms clearance. Similarly, producers should also recommend clients enforce physical barriers, backup alarms and high visibility clothing to enforce safety.
Producers should also consider partnering with specialty carriers for clients facing these risk exposures. Carriers that understand complex industries like lumber and building materials can offer tailored, comprehensive insights to address the risks within that industry. They can also offer guidance on the right technology and insurance coverage in which insureds can invest to protect their operations.
This rise in frequency and severity of claims does not appear to be slowing down, and producers can support their clients by proactively communicating the factors driving these incidents as well as the trends fueling the rising costs of the claims. Importantly, producers can offer tailored risk mitigation efforts to help their clients operate safely and profitably for years to come.
Opinions shared in this piece are the author's own.
Mike Seiwert is a senior loss control representative with Pennsylvania Lumbermens Mutual Insurance Company (PLM), the oldest and largest mutual insurance company dedicated to the wood products and materials industry. He can be reached at mseiwert@plmins.com. To learn more about Pennsylvania Lumbermens Mutual Insurance Company, visit www.plmins.com.
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