What you need to know about transport insurance
The South African transport industry is a sizable - and growing - industry. It’s a specialised industry with specific requirements that present unique risks. This makes selecting effective, comprehensive insurance cover quite a challenge but very important.
As is the case with most types of insurance, companies tend to select transport insurance based on a low excess structure or a low premium. As a result, when something goes wrong and they need to claim, their cover often ends up being insufficient.
Problems in the industry
The transport insurance industry is faced with the following problems that could compromise the safety of their vehicles and drivers:
- Many trucks on South African roads are not roadworthy. It is vitally important to ensure all your vehicles are roadworthy; if not, this will directly and negatively impact the success of an insurance claim.
- Drivers are not properly trained and often do not have a valid or the required license for the vehicle they are operating.
- Some companies reward drivers for arriving at their destinations earlier; this motivates drivers to skip much needed breaks and encourages them to drive too fast.
- Late loading of consignments forces drivers to travel during unsafe hours (11pm to 4am) and overloading causes delays at weighbridges when goods need to be unpacked and repacked.
One of the ways to monitor - and control - the situation within your fleet is to invest in cabin cameras. These can offer the following benefits: reducing insurance premiums and liability claims, saving fuel and ensuring improved safety and performance standards.
- Every driver must have a valid and correct driver’s license for the vehicle they are driving. Do a thorough background check on every driver before hiring them, as an accident involving an illegally licensed driver or one that lacks proper training can have disastrous consequences for your business.
- Every driver must renew their Certificate of Fitness (COF) and Professional Driver’s Permit (PDP) annually, as well as their RTMS (Road Transport Management System) accreditation. This follows that each driver must go for regular eye, blood sugar and blood pressure tests. TB tests are also advisable.
- On-going training should be provided to ensure that drivers maintain the highest driving standards. The following training is recommended: Road safety awareness; Accident procedures; Dealing with fatigue; Loading and unloading safely; How to carry out routine safety checks on the vehicle.
Don’t forget liability insurance
Liability insurance is a key component of comprehensive insurance cover for any transport business. This will cover you for third party injury or loss where negligence can be proven. Transport companies should also consider roadside assistance tailored to the size of their vehicles.
Be sure to check whether territorial limitations apply on your insurance policy. This means that your policy may only cover your vehicles when they are travelling in South Africa and additional cover will be needed when travelling across borders. It is very important to carefully note the terms and conditions of your policy.
The effect of the Consumer Protection Act
Due to the Consumer Protection Act, standard terms and conditions no longer absolve transporters from liability and responsibility for the cargo they carry. Transporters now need to disclose any such exceptions in simple language and at reasonable terms. The Consumer Protection Act will have a considerable impact on the way transporters communicate and sell their services, as the terms now need to be simply stated and clearly understood.
Speak to your local Garrun broker to get the best advice for your transport business or any other commercial venture.