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									Reprinted from the January/February 2006 issue of The Financial Manager magazine

             ROAD RISK:
    Carefully screening
drivers and investing in
   traffic safety courses
 can help broadcasting
  and cable companies
 manage transport risk.


                                                          Course                                Traffic’s a mess and trucks
                                                                                                are expensive. Here’s how
                                                                                                to keep risks under control.

                                                                                                By Mike Heembrock

                                                                                                    pricing is frequently their only focus.
                                                                                                    With 10 autos to insure in a station’s
                                                           adio and television broadcasters and     fleet, the manager may be negotiating
                                                        cable TV companies deploy a wide range      for the lowest premium per vehicle. But
                                                        of vehicles, from private passenger vehi-   it’s important to consider loss prevention,
                                                        cles for sales to vans and trucks stocked   and which insurer is likely to provide the
                                                        with sophisticated, costly equipment for    greatest help in controlling exposures
                                                        mobile broadcasting and production.         and mitigating risk. By including loss pre-
                                                        Those responsible for insurance at broad-   vention in the insurance purchasing
                                                        casting companies should be aware of        process, the station is doing more than
                                                        the many exposures and risks that           paying a premium. It’s getting valuable
                                                        accompany the operation of these fleets.    assistance in managing its commercial
                                                        There’s a strong need for these business-   auto operation, which for many broad-
                                                        es to consider auto and transport expo-     casters can be an exposure that produces
                                                        sures when conducting a comprehensive       losses exceeding policy limits.
                                                        risk assessment.                                A broadcaster could experience a sig-
                                                           The fact is that many stations, espe-    nificant financial loss if, for example, an
                       Photo: Cox Communications Inc.

                                                        cially smaller operations, simply don’t     electronic news-gathering truck rolled
                                                        have risk managers on staff to help         over en route to a developing news story.
                                                        them determine their insurance needs.       Large broadcasting trucks can be awk-
                                                        The task can fall on the company’s chief    ward to maneuver due to their weight,
                                                        financial officer, corporate controller,    stopping distance and cornering capabili-
                                                        station general manager or station busi-    ties. Moreover, they are susceptible to
                                                        ness manager.                               tipping over in high crosswinds. If the
                                                           Too often, commercial auto operations    vehicles themselves weren’t challenging
                                                        are relegated to last place when stations   enough, consider the addition of masts,
                                                        are purchasing insurance. That’s because    antennas and satellite dishes. The
replacement value of an electronic news-        (NHTSA) and the Insurance Institute for        must resist the temptation to squeeze too
gathering truck can escalate dramatically       Highway Safety (IIHS) have Web sites           much into a day of calling on sponsors or
when you add $100,000 to $200,000 of            reporting safety ratings for passenger         customers in a bid to boost sales. This
broadcast electronic equipment. In addi-        vehicles. If the plan is to spend              overload can jeopardize their safety as
tion, should the accident cause any             $25,000 to $35,000 for a sedan, SUV            well as the good will of the station in the
injury, this kind of loss can ruin a compa-     or truck, buy a vehicle with a high safe-      community.
ny’s reputation and loss history. All the       ty rating. This may make the difference           Station owners set the tone for safety.
more reason for employers to consider           between no injury and a severe injury          They also are responsible for reviewing
who is driving these units.                     for one of your employees.                     the company’s vehicle-related loss history
   Many insurers view very young dri-                                                          over the past three to five years to deter-
vers, inexperienced drivers and older         • Require all company drivers and occu-          mine where improvements could be
drivers as difficult exposures, and for         pants to wear seat belts. Set a good           made. Always ask: If something had been
good reason: statistics show they are           example: make such precautions part            done differently, if one area of vehicle
more likely to be involved in crashes           of the company’s culture.                      operations had received a bit more atten-
than those in other categories. Station                                                        tion, could losses have been shaved by 5
owners need to take this into considera-      • Stay on top of needed repairs. Many            percent to 20 percent?
tion when putting anyone under 21,              people think that if a car or truck pass-         This review is especially important for
over 70 or with fewer than three years          es state inspection, it’s in good shape.       stations operating in metropolitan areas,
of driving experience behind the wheel          That’s not necessarily so. Parts of            where the U.S. Census Bureau expects to
of company vehicles. If this is unavoid-        broadcast vehicles can deteriorate             see most of the nation’s population
able, a clean driving record, driver train-     quickly. For example, tires are a critical     growth during the next 25 years. The
ing and routine supervision is a must.          aspect of vehicle safety, and they can         IIHS notes that vehicle miles traveled also
   Something else to note: Managers who         develop problems within days. Tire             are increasing rapidly in America’s cities.
eliminate company vehicles to rely              quality is especially important on             From 1983-2003, the institute says, total
instead on employee-owned vehicles for          expensive and heavy news-gathering             vehicle miles traveled rose 75 percent,
sales, pick-ups and deliveries may think        vehicles. And, even the highest quality        but miles traveled in urban areas skyrock-
they have skirted the issue of fleet expo-      tires must be inspected regularly for          eted 90 percent.
sure. Not so. Having employees use their        proper wear and inflation.                        Greater numbers of cars and trucks on
own vehicles for company business does                                                         the road increases the odds that more
not shield companies from liability.          • Make it company policy to document             crashes will occur, resulting in more
Employees may not have proper auto              all crashes, no matter how minor. Such         employee injuries or deaths. This will
insurance for business-related activities.      thoroughness will help the insurance           drive up the costs to obtain insurance
When employees are using their cars for         carrier and the station manage losses          which, in turn, will drive up the costs of
company business, employers should              better. Require employees who drive            broadcast operations. But understanding
urge them to obtain adequate personal           for company business, whether in com-          a station’s transport risks – and applying
insurance.                                      pany vehicles or their own cars, to            commonsense measures to boost safety
   Here are several more ways broadcast-        report any collision to their employer         in a fleet – can go a long way to help
ers can manage their transport risks:           and obtain a police report at the scene.       protect the company’s future.
                                                This report should prove useful should
• Screen new and existing drivers by            any severe damage, not visible on the                    Mike Heembrock, a vice president at
  instituting an annual motor vehicle           exterior of the car, turn up later. Even       Chubb & Son, is a senior loss control specialist
  record review. For privacy purposes,          more important, it should relate                for commercial auto and workers compensa-
  broadcasters will need their employees’       whether either of the drivers or any of               tion at Chubb Commercial Insurance in
  permission first, but once they under-        the occupants of the cars involved was                              Whitehouse Station, N.J.
  stand this is a job-related issue, most       injured.
  will give their consent.
                                                 Drivers are probably the most problem-
• Invest in driver training courses.          atic piece in the transport risk equation.
  Driver awareness programs can be            The biggest challenge for a broadcasting
  provided by the station’s carrier, the      organization is to declare safety as a pri-
  American Automobile Association or          mary goal, even more important than
  area safety councils. Online driver         getting that scoop or meeting that dead-
  training is increasingly available.         line. Few stations, especially smaller ones,
  Drivers of fleet vehicles such as buck-     can afford the luxury of having a full-time
  et trucks, electronic news-gathering        safety manager. But someone has to take
  trucks and satellite trucks can get spe-    the lead – it’s usually the principal – and
  cialized behind-the-wheel training          he or she must hold everyone account-
  from dedicated schools, vendors or          able for adhering to safety standards.
  vehicle manufacturers.                         It’s critical, for instance, that employees
                                              understand they can’t be careless or take
• Spend for safety. The National Highway      imprudent steps to reach a news scene or
  Traffic and Safety Administration           production site. Also, those in the field

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