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Managing the hidden risks associated with trucking

Published on: 30 August 2016

 

The trucking industry is fraught with risks, from hijacking and theft through to damage caused by protest action. But the cost of a breakdown or accident extends beyond the cost of repairing or replacing the vehicle alone, says MiWay.

Morné Stoltz, Head of Business Insurance at MiWay, says the true costs and complexity of managing the aftermath of a hijacking or accident can come as a shock to the transport company, particularly if the business is new to the market.

“According to MiWay’s Business Insurance commercial vehicle department, hijacking is the biggest risk facing trucking and commercial fleets at the moment, with losses amounting to an estimated R3 billion a year. However, damage and losses sustained during protest action is also becoming a significant challenge, with several trucks destroyed in just one week of protest action recently.”

Many transport companies and fleet owners fail to take into account the full potential costs of loss or damage to vehicles, and are often underinsured when disaster strikes, says MiWay. “As a specialist in this area, MiWay has built a network of service providers and tailored its commercial vehicle insurance products to cover the true impact of an accident or loss,” says Stoltz.

Companies tend to insure their trucks at retail value, overlooking the fact that they may have a credit shortfall amounting to hundreds of thousands of rands, he says. Or they may neglect to include replacement vehicle cover, putting them out of business for weeks while a vehicle is being repaired.

Cargo fleets should extend their insurance cover to include trailers and goods in transit, Stoltz advises, and they must ensure that provision have been made for towing or alternative transport of goods in transit should a vehicle break down. “The cost of a breakdown on a long haul route could extend beyond the cost of towing and repairs – it could include damage to goods in transit and penalties related to perishables expiring before they can be delivered. These factors must be covered within the company’s insurance policy.”

In addition, the transport company may not be aware that it is liable for clean-ups and repairing damage to infrastructure caused by its vehicles in the event of an accident. Stoltz notes: “For example, if a truck transporting hazardous chemicals should overturn, resulting in a chemical spill into a nearby stream, the company is responsible for the rehabilitation of the water supply. Should a truck be involved in an accident that results in damage to the road or cargo being spilled on the road, the company becomes responsible for clearing the road and covering the cost of repairs. It is vital that the transport company considers these risks and potential costs, and ensures that its insurance partner takes charge of all costs and clean-up operations as a matter of urgency.”

Stoltz notes that MiWay Business Insurance provides for comprehensive commercial vehicle, trailer and goods in transit cover through a single point of contact for emergencies. “From specialised roadside assistance through to ensuring the safety of goods in transit and attending to spills in the event of an accident, MiWay covers all eventualities for its commercial transport clients,” he says.