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INSURANCE PROS SAY CREATING ‘CULTURE OF SAFETY’ IS AMONG NEEDED STEPS TO CONTAIN PREMIUM INCREASES WRITTEN BY ERIC WOOLSON
abuse and molestation accusations against drivers and bus aides, which Jeff Carlson, manag- ing general agent of Hartford's school bus program, said is often left silent in many policies. "Tere's a saying in the insurance industry that if it's silent it means it isn't covered," said
W lacked staying power. "In any business model, rates cannot go down
year after year after year. Eventually, something has to give," said Fran Walsh, vice president of passen- ger transportation at Lancer Insurance Co., in Long Beach, N.Y. "With claim severity and the legal environment getting worse, it is once again time for a market correction." Carlson agreed with that assessment, predicting
premium increases of 3 to 10 percent this year de- pending on contractors' previous claims experience. "Even if you're pitching a shutout, most carriers
are looking at 3 to 4 percent increases," he warned. However, there are steps that contractors as well
as school districts can and should take to contain those inevitable increases. "Choose a deductible that works for you. Tat
has a very big impact," advised Randy O'Neill, senior vice president of customer service at Lancer. "First dollar (coverage) may not make a lot of sense for you if you have a consistent track record of predictable claims. Pay for the (bigger claims) you really can't handle on your own. If you can take a
Carlson, who also holds the title of executive vice president with Te Capacity Group. Carlson and three peers special-
izing in bus contractor coverage expect policy premiums to rise across the board after remaining flat or decreasing for the past six or seven years. Tis was due to the soft economy and a market glut partially fueled by cut-rate upstarts that
deductible where you have skin in the game, you're going to be a lot more diligent and, hopefully, you can put that money back in your pocket in the end." Walsh added, "You never want to transfer a pre- dictable risk to an insurance company." Michelle Silvestro, assistant vice president and
national marketing manager for National Interstate Insurance Co., near Cleveland, said costs are con- trolled with effective risk management. "And that's not a 12-month proposition. It's
a lifestyle change, a long-term commitment to safety," she added. "We advocate training, safety and consistency in what they're doing, but they can't do it if there isn't a top-down commitment to a culture of safety in their organization. If you have a safety director who doesn't get support from the owner, the employees will see right through that." O'Neill contended that cost containment is "all about the drivers." "So we spend and continue to invest a lot of time
and effort working with bus folks on the operational side of the business to develop the industry's finest driver training tools," he continued. Lancer, which is rated excellent by A.M. Best
Company and has been rated by the Ward Group as one of the nation's top 50 insurers in 2011 and 2012, sends its regional managers on-site to work with contractors on driver training and compliance. Te company also devotes considerable time and effort providing training materials to contractors,
hen it comes to insurance coverage for school bus contractors, or school buses in general, sometimes it's what you don't see that can cost you more, warned industry experts. Tat's especially true when it comes to coverage for sexual
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