Insurance Audits & Site Inspections

Posted on July 30, 2008 by LCT Magazine

By Jim A. Luff

Anything with the word audit in it can conjure up all sorts of scary thoughts.  Of course with an insurance audit, the worst thing that could happen is you score a dreaded “8” and your policy is canceled on the spot.  It might be tough to get insurance if you were canceled in the middle of your policy but you will find other insurance, you’ll just pay a premium for the premium if you know what I mean.

The  insurance company is on the hook every time you go out on a run so they have a vested interest in how your company is managed.  Specifically, they want to know how you hire, how you train, how you monitor work in progress and equally important what steps you and the chauffeur would take in the event of an accident. 

The end result of the inspection is a rating that ranges from 1 to 8.  If you get an 8, you will probably never see the insurance guy again as you are canceled on the spot.  If you are a 7, you will probably be canceled at the end of your policy.  If you get a 2 you are above average and a six you are below average.

I visited with Lance from Lancer Insurance.  I still think that is a kick in the pants that Lance from Lancer was sent to inspect us.  Lance lead the discussion in an organized format from where liability begins with the hiring of a new chauffeur and ends with a crash or incident requiring the insurance company to pay out.  Along the way he provided excellent advice.

We started with how we go about recruiting our new chauffeurs.  Next we reviewed the hiring steps.  This includes background checks, driver record checks, drug and alcohol testing, interviewing procedures and all the things you should do to make sure you are hiring a person with good character with a good driving record.  Next we reviewed the training that takes place once the person is hired and certainly before we hand him the keys to a $180,000 limo bus and wave goodbye as he takes his first trip.

We then talked about the documentation of accidents and specifically what are chauffeurs trained to do in an accident and how does the company respond when an accident takes place.  Are there forms?  Do we take photos?  Do our vehicles have “witness cards” and “passenger cards” for independent review?  Do we do post-accident drug testing and what factors of an accident determine when you should do a test and when you don’t need to test.  By the way, a fatality, an injury or a tow all require a drug test to be done and in case you forget this, just remember “FIT” in an accident.  Fatality, Injured or Tow.  Lance also reviewed the details of our last facility inspection by the Highway Patrol

The entire process takes about two hours and is relatively painless as long as you have written documentation on all the procedures I described above.

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