Insuring the transport sector in 2020

As many businesses continue to adapt to changing business models and further lockdown scenarios in our national efforts to beat Covid-19, we’ve taken a look at how that has affected organisations operating across various industries and what it could mean for their insurance needs going forwards.  We caught up with Laura High, Director at Yutree Insurance Ltd, provider of our Haulage product on Aviva Marketplace, for a closer look into the impact on the transport sector.

“It’s fair to say that the pandemic has had a huge impact on many types of businesses, not least the transport sector. During the months of the first lockdown, road freight and courier transportation was classified as an essential activity by the UK Government. Essential delivery drivers have worked tirelessly alongside warehouse staff to supply the public with goods throughout the crisis. That is not to say that the sector has not faced its fair share of worry and uncertainty.

A heavy reliance on e-commerce since lockdown began, resulted in an increased number of people being required in driving roles. As well as increased demand generally for the movement of certain goods, the requirement for other goods dried up. Disruption to supply chains and the restriction on movement of goods (and indeed people) have created enormous pressure on the sector and it’s only now that the true cost of such an unprecedented shutdown is starting to show. Many businesses have reported a reduced turnover/wage roll directly resulting from the Covid-19 downturn.

It’s not been all bad news for the sector. Home supermarket deliveries have increased and the requirement for general goods to be moved will continue to exist through another lockdown. Firms may just have to innovate and diversify to get new clients if they’re to keep trading at the levels they were previously. The UK Government was announcing the gradual easing of restrictions however, with a second national lockdown upon us, haulage firms will have to adapt to the impact that this’ll have on their customers and supply chains if they are to prosper and thrive through this period.

Haulage Operators

As insurance brokers, it’s important to guide and advise our transport and logistics clients through this period of uncertainty helping them to ensure that risk management does not fall by the wayside as they work to operate their businesses through the Covid-19 pandemic.

Some areas to think about when talking to your clients in this sector:

• Risk Assessments – Firms will need to have updated their risk assessments to include the risks from coronavirus. Assessments should include the risk to employees and the public. They should place particular emphasis on higher risk employees. This should also include measures being put into place should an employee become ill which avoids having to isolate the whole workforce.
• PPE – Due consideration should be given to purchasing the PPE required for employees.
• Customers’ premises – Firms should liaise with their customers to ensure that drivers can have access to toilets and hand washing facilities. They should also understand their ability to maintain social distancing at customer sites and rest areas.
• Own premises – A plan for the site should be drawn up including being able to maintain social distancing.
• EU work – Firms should familiarise themselves with different Covid-19 requirements in different countries (even variations within the UK considering local lockdowns etc). There may be additional complexities in crossing borders which should be investigated before travel commences. Sudden quarantine rules may come into force as seen recently with France. Road haulage firms are exempt from many of the restrictions but not all. Firms should check with the Freight Transport Association or the Road Haulage Association before travelling.
• Additional workload – If a firm has taken on significant amounts of additional work and requires the use of agency drivers, it is imperative that those drivers are trained, and standards of safety management are maintained. If they have sub-contracted some of their work out, they should retain a record of the sub-contractors’ insurance. If firms take on work handling different types of goods then they should ensure that additional training is given on the manual handling of such goods. Has time critical work been taken on where it wasn’t carried out before? Again, this requires additional training. Written records of all training should be kept by the firm.
• Driver hours – Drivers’ hours regulations should be adhered to at all times. This may be impacted by less staff, staff off ill etc but a focus should remain on how to manage it.
• Vehicle maintenance – Firms must ensure that vehicle maintenance continues, and vehicles are checked before going back into use if shutdown. MOTs need to be undertaken following exemptions.

As they provide essential services, haulage firms have a good chance of thriving through this time. Cash flow is key, and firms will be more stringent than ever about how and when payments are made. Businesses will no doubt be looking to cut costs where they can, including their insurance spend. As brokers, you will want to make sure that they’re not exposing themselves by reducing their cover to save money and that their insurance continues to protect them and supports them to maintain their resilience and to come out the other side of the Covid-19 pandemic.

At Yutree, our underwriters, with specialist transport knowledge, have been helping brokers with innovative solutions where they’ve struggled to place cover under difficult circumstances. Turning down financials accurately to reduce premiums, noting furloughed workers correctly, making sure that all risk management is taken into account to get more competitive terms, asking the right questions and giving the best advice are all ways that we have been helping brokers to help their transport and logistics clients. If there is anything that we can help you with then we would be delighted to do so.”

Yutree’s team of underwriters are available to answer queries, quote for new risks and to advise you on how best you might help your haulage clients at this challenging time, including working on unoccupancy wordings and flexible underwriting to recognise dips or increases due to the current operating conditions.

To find out more about how Yutree can support you in placing Haulage risks, visit the Haulage product page, under ‘Freight and Carrier’ on Aviva Marketplace where you’ll find our wide range of solutions for those hard to place risks.