Luxury Coach & Transportation

March 2019

Magazine for the professional limousine, charter and tour industry.

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LUXURY COACH & TRANSPORTATION MARCH 2019 35 Mushorn said. "We'll do a premium reduction commensurate with the client's assumed risk. For example, depending on the size of the account, an operator who assumes a $10,000 deductible, may get up to a $30,000 reduction in premium by taking on $20,000 in expected losses on an annual basis. If you have a bad year, there will more than likely be an aggregate stop loss in place to protect you. If you have a good year with minimal or no losses within the deductible layer, you would benefit from the reduction in premium." Captive Insurance Wiltgen also highlighted captive insur- ance program options for operators with good records. "A deductible is where you get some savings up front for taking on the risk," she said. "You take on the risk if you have an accident, you pay the first whatever of that claim, and then the policy kicks in after that. Captives are kind of doing the same thing, but on the backend. So you pay in your premium, we set money aside to pay for your claims, and if you don't use it all, you can get that money back with the investment income that it gener- ates. Or if you have more claims than we thought for that layer of risk that you're taking, you can pay more. But again, there's a stop loss that's built-in. We realize you want to have a light at the end of the tunnel as well." Group captives are programs where operators band together, she said. "You have to be better than average, and must have a great loss experience, and really good risk management practices. If your broker thinks you have poten- tial, they will help you learn about those different programs." e costs are generally lower be- cause better operators buy the insur- ance, she said. "We look for preferred operators who've been in business at least five years. We will ask for your financials, so we will make sure you can take on risk." — Martin@LCTmag.com how are you managing it?" ey emphasized the need for an operation to have a thorough, consis- tent, and vetted safety program. Sim- ply not having accidents is not good enough because eventually everyone's luck runs out. Affiliate Insurance Mushorn advised operators to know which companies they are farm- ing out business to. "Make sure you've been to the operation, you know the owners, and how they conduct their business because you're passing your customers on to them. Make sure you not only have the certificate of insurance, but also the endorsement to the policy naming you as an additional insurer. is way, you get notified if and when there's a cancellation on that policy. Have a contract with them. Don't let them farm your business out. Insur- ance will follow the vehicle, but you'll be involved, you'll be sued, and your policy will be in access play." Risk & Rewards Mushorn and Wilten advised opera- tions to consider taking on more risk at a reasonable level if it helps save money. I nsurers can work with a fleet business to balance the anticipated level of risk and claims against the right deductibles and premiums. If a company sustains the same level of accidents and costs, then in some cases it's better to pay it dollar for dollar be- low the designated deductible amount. "We as a company look at deductible layers and see where it makes sense," sion of the insurer. A broker, on the other hand, represents the insurance buyer. Stay Informed "Do you know who the insurance com- pany is?" Wiltgen asked. "Do you talk to them? Do you have access to them? Do you challenge the decisions? Are you willing to do that? It's O.K. to ask questions. I would venture insurance is probably one of your top three expens- es. So just like you ask your accountant questions, and you ask your bus and limo sales [reps] questions about the finances, you should be asking about your insurance." Wiltgen estimates the market has about 3,000 insurance companies, and advised operators to look for ones with A-ratings, such as A+, A-, etc. "ere are all kinds of ratings, so have your broker talk to you about that." Some airports require for-hire commercial passenger carriers to have A-rated insurance. Looking At You Mushorn and Wiltgen underscored how insurers thoroughly check out their clients' businesses, such as reviewing their websites, all public records and information, five years of historical information, finances, maintenance, fuel usage, and even what surrounds a business (on Google Earth). "Put your best foot forward, make sure the information you submit us is accurate, and tell us your story right," Wiltgen said. "e more you can tell us, the more comfortable we are with the information. Be realistic." "You are selling yourself to us, so you have to give us reasons why we want to write your business," Mushorn said. "What sets you apart from the rest of your peers? What do you do better? What are you doing on the safety side? What technology are you using and MANAGING YOUR FLEET INSURANCE • Look at your renewal information at least 90 days out. • Look at your loss experience at least on a quarterly basis. • Get a copy of what your accountant submits to the government on your behalf, and review the information so you know how you are being represented to the insurance company. • Keep your website updated, especially the locations you serve or don't serve anymore. • Report claims immediately. They get more expensive the longer you wait. • Alert your carrier if you are making major changes such as buying buses, moving into interstate service, or merging with or acquiring a company. P H O T O : G E T T Y I M A G E S . C O M / O R L A

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