Understanding and explaining how
changes will impact trucking businesses and insurance risk is critical
By Harish Kapur
Recent changes to commercial driver’s license (CDL) oversight and immigration enforcement are reshaping the trucking labor market in ways that are already impacting underwriting, driver availability and fleet risk profiles. Such developments are not simply limited to policy changes; they have real-world impacts on daily operations and the bottom line for fleet managers, insurers and agents.
For independent agents serving transportation companies, understanding and explaining how these changes will impact business is critical.
Market effect of CDL requirement tightening
There is a longstanding safety issue in transportation, stemming from too many drivers lacking enough training or experience. Improved screening and enforcement have helped remove unqualified drivers, which translates to safer roads and more defensible underwriting. At the same time, these changes are contributing to a smaller pool of available drivers, constraining company resources, particularly for fleets serving high volume freight corridors and border-adjacent regions.
In border states, the picture is even more complex. Many qualified drivers continue to operate legally under existing visa and licensing frameworks, but heightened activity from law enforcement has created uncertainty. Properly documented drivers may avoid certain routes or states altogether due to fear of disruption or detainment.
As freight demand remains high, diminished labor capacity has become more problematic. From a fleet perspective, this issue can lead to sudden route changes, high mileage usage and difficulty staffing certain routes. For agents, this highlights the importance of understanding not just which drivers are licensed, but where and how a fleet is operating.
Driver documentation, verification and control
As labor dynamics have evolved, underwriting scrutiny has sharpened. Insurers are paying closer attention and asking more pointed questions about driver onboarding, documentation and internal controls. When filing claims, fleets should be able to answer:
- Who is driving the truck?
- Is the driver listed on the policy?
- Is the vehicle scheduled correctly?
- How much experience does the driver have?
The fleets that remain competitive will be the ones that
treat compliance, documentation and risk management
as core operations, not as afterthoughts.
One way insurance companies are securing the verification process is through telematics. Doing so provides critical data insights, including the answers to these questions, how many miles are being driven, and how many drivers are immediately reporting incidents. This information helps insurers confirm that fleets are operating appropriately. Agents who can successfully support their clients’ use of telematics as a verification tool can significantly improve an insured’s risk profile.
Effects: Exposures grow as driver pools shrink
While proper driver verification can help companies navigate recent labor changes, there are additional risks agents need to consider, including mileage concentration. When fleets operate with fewer drivers, those drivers tend to log more miles. Increased mileage raises exposure, even if those drivers are more qualified.
Extended hours, longer stretches between rest periods and expanded team driving arrangements can introduce fatigue-related risks. While it’s still too early to draw definitive conclusions from claims data, exposure indicators are already flashing.
Team driving requires careful oversight. While it can help maintain delivery schedules, the process also keeps equipment on the road for longer periods, increasing wear and tear, maintenance risks and the likelihood of loss. A proactive agent should speak with fleet customers to ensure they have considered these risks in their driver schedules.
The most common fleet mistake: Desperate decisions
Outside of mileage concentration risks, the most common challenge for trucking businesses is often during the adjustment period after regulations are passed. Fleets under pressure to meet contractual obligations may make short-term decisions that can damage long-term stability. Common missteps include:
- Hiring. Fleets feeling the pressure to hire immediately may offer far higher wages than necessary. Taking time to analyze the costs in advance can help limit this mistake.
- Overworking drivers. While adjusting, we often see fleets pushing drivers to stay on the road longer to keep loads moving. This can cause driver fatigue and lead to accidents.
- Failure to adjust. Alternatively, transportation businesses may underestimate the potential impact of regulatory changes and not adjust at all. This failure to recalibrate operations can create greater risks.
In some cases, desperation can lead fleets toward risky practices, such as double brokering. Double brokering occurs when a freight broker with an existing shipper contract passes the shipment to another broker or carrier without informing the original shipper. While this may seem like an effective practice to offload work and manage capacity concerns, in the short term, double brokering is illegal and can lead to expensive losses.
For agents, these scenarios are critical discussion points with clients. Agents should talk with their insureds about the impacts of staffing pressure and operational limits, so they understand the risks before taking desperate measures.
What to watch now
As fleet managers navigate this new suite of risks arising from evolving CDL and labor dynamics, agents should focus their advice and counsel on a few important areas:
- Hours-of-service discipline. Ensure customers are strictly adhering to hours-of-service guidelines to limit driver fatigue.
- Driver pipeline quality and vetting. With new labor laws, hiring and working with qualified drivers is essential. Work with insureds to define good hiring and onboarding practices.
- Contract pressure. While existing contracts may create pressure on fleet managers to get work done no matter the cost, this can be a dangerous approach. Confirm insureds understand the risks of taking unsafe shortcuts.
Additionally, agents should partner with freight brokers who can help anticipate regulatory changes. This will allow agents to offer comprehensive advice and risk mitigation tips to protect the business.
Staying insurable amid change
Regulatory and labor changes will continue to shape the trucking industry, but they do not have to damage industry businesses. The fleets that remain competitive will be the ones that treat compliance, documentation and risk management as core operations, not as afterthoughts.
Successful agents can help clients anticipate how labor pressures and changes may impact insurability and can offer adjustments and recommendations to ensure their operations are as protected from risk as much as possible.
The author
Harish Kapur is CEO of Across America Insurance Services, a specialized wholesale insurance agent serving the commercial trucking and transportation industry.
