Q&A: Proper Safety and the Right Coverage Can Go a Long Way with Property and Casualty Insurance

by Eric Stiles, lead account executive, Sentry Insurance

Question: For the most part, my employees make good decisions when it comes to their own safety. However, we continue to see some choices by employees that not only violate our policies, but also result in an injury. Is there a way I can keep our employees from making these decisions?

It starts with management. To create a safe work environment, expectations regarding safety need to be developed and communicated. Most importantly, the safety guidelines must be followed by all employees, including and most importantly, managers. Here’s what to do:

  • Create a Safety & Risk Management policy statement and share it with every employee.
  • Annually, require every employee to read, agree with, sign and return an acknowledgement stating they will follow the guidelines in the Safety & Risk Management policy statement.
  • Set a safety improvement goal each year, and update employees on the injury and loss trends on a quarterly basis.
  • Integrate safety performance objectives into all employees’ annual performance evaluations and update employees on a quarterly basis of their results.
  • Ensure your management team is held to the same guidelines as all other employees.

Ultimately, working safely and preventing accidents need to become part of the organization’s culture. Setting expectations and monitoring results is a great first step.

Question: What do I absolutely need to do to prevent vehicle accidents from hurting our business?

Driver selection is an essential part of avoiding accidents. By definition, safer drivers will get into fewer accidents. From the company’s perspective, there are two additional factors: the accidents safer drivers get into likely will be less severe and more likely to be someone else’s fault. Both of these factors will tend to mitigate the cost to your company.

Conversely, unsafe drivers represent an increased, ongoing exposure to more and greater losses. Having a formal, written hiring policy that specifically targets problem drivers for exclusion in your hiring process may help protect you from loss due to accidents.

Choosing better drivers sounds simple: hire better drivers and don’t hire problem drivers. Making it happen requires having a plan in place. Follow these strategies to help protect your business from the potential risk of negligent entrustment:

  • Make it a practice to review each driver’s motor vehicle record as a condition of employment.
  • Use preset criteria to determine what is acceptable. Use concrete numbers and set numeric limits for how many accidents and/or violations it takes to disqualify a hire.
  • Train new drivers on safe driving practices for the specific type of vehicle they will operate.
  • Have a written safety policy and distribute a copy of that safety policy to new drivers.
  • Require new hires to sign a safe driving practices commitment statement.
  • Have potential employees complete a ride along or driving test with a current employee to observe their driving skills.
  • Require new drivers to attend periodic safety meetings.

Driver selection is the first step to reducing your exposure to negligent entrustment. Reaffirm your commitment to safety with regular reviews, training and support.

Question: Does my standard property insurance policy cover my equipment when it breaks down from an internal source?

Most likely not. A property policy covers external causes of loss – things like fire, lightning and wind. A mechanical failure, electrical surge or other internal source wouldn’t be covered. For that, you’d need to consider equipment breakdown coverage – sometimes called boiler machinery coverage.

Equipment breakdown coverage protects you from several exposures that can bring your business to a halt – including failures of electrical, mechanical or production equipment. Here are some examples of equipment covered under the plan:

  • Printing presses
  • Offset
  • Rotogravure
  • Flexographic
  • Letterpress
  • Finishing and binding equipment
  • Programmable logic devices
  • Electric motors
  • Enclosed gear sets
  • Line shafts
  • Electrical equipment
  • Switch panels
  • Circuit breakers
  • Motor control centers
  • Pad or pole-mounted transformers
  • Boilers

Even the most well-maintained equipment can experience a mechanical or electrical catastrophe. Equipment breakdown coverage provides you with the protection you need to help cover the cost of repairing and replacing your damaged equipment. Check with your insurance carrier to learn more about specific coverage for your business.

As an endorsed P&C and 401(k) carrier for FSEA, Sentry Insurance offers coverage options and services to meet business needs. Eric Stiles is Sentry’s lead account executive responsible for maintaining the FSEA/Sentry relationship.

Property and casualty coverages and safety services are underwritten and provided by a member of the Sentry Insurance Group, Stevens Point, Wisconsin. For a complete listing of companies, visit sentry.com. Policies, coverages, benefits and discounts are not available in all states. See policy for complete coverage details.

This document is made available by Sentry Insurance a Mutual Company and its subsidiaries and affiliates (collectively “SIAMCO”) with the understanding that SIAMCO is not engaged in the practice of law, nor is it rendering legal advice. The information contained in this document is of a general nature and is not intended to address the circumstances of any particular individual or entity. Legal obligations may vary by state and locality. No one should act on the information contained in this document without legal advice from competent and licensed local professionals. 40-165514001311 7/29/16