BUSRide’s ongoing series of interviews with Tim O’Bryan, president of Service Insurance Agency, Richmond, VA, now turns to the lesser known legal and insurance responsibilities of motorcoach operators.
From a risk management perspective, can you shed some light on the lesser-known legal responsibilities of motorcoach operators and owners, as they relate to their insurance coverage?
One that always concerns us most is contractual liability. Our customers – motorcoach operators – are signing contracts all the time in order to get work. Most of these contracts have an insurance section which will define the motorcoach operator’s responsibilities. Review these insurance requirements with your agent prior to signing so that your agent can evaluate if you have the necessary coverages.
The responsibilities are clear: Read all contracts thoroughly before signing. Talk it over with the agent. Have him check all contracts from an insurance standpoint.
Employment practices liability is another lesser known area of concern. These types of liabilities arise from the employment process and workplace environment. The most frequent types of claims are wrongful termination, discrimination, and sexual harassment. Motorcoach operators must make every effort to insure that employees are treated fairly and the workplace is not a hostile environment. Motorcoach operators should have a procedure for employees who wish to voice their concerns of unfair treatment, wrongful termination or discriminatory actions of one kind or another.
Another area of concern would be cyber security for personal information kept on company computers, whether it’s a client’s information or an employee’s information.
Why do these areas and responsibilities seem to be
Operators often take contractual liability for granted by assuming the fine print in most contracts is all the same; like a boilerplate, they’ve seen thousands. However, a new risk manager may have added in something the company didn’t read carefully — such as hold-harmless clauses, or waivers of subrogation which operators must address before signing the contract.
As for employment practices liability, issues in this area do not occur that often. Still, the motorcoach company must have some system in place so that people who feel unfairly treated can voice their concern without fear of retaliation.
What are the inherent dangers in not understanding the importance of these responsibilities, and adhering to policy in these areas?
As for contractual liabilities, there are myriad hidden pitfalls for signing or promising anything the company cannot deliver. The trouble is they can be easily missed without a diligent review.
Employment practices liability, in this day and age, revolves around issues involving wrongful termination and discrimination. It can lead to consequences that companies cannot afford to dismiss or handle arbitrarily.
Also, there can be a danger of a hostile work environment; for instance, employees sharing inappropriate emails and photos — anything that targets other employees or makes them uncomfortable. A company that does not address these issues will have a problem at some point.
The wise operator will have additional coverage in this area as a part of the general liability or as a stand alone policy. It’s called Employment Practices Liability Insurance (EPLI).
Doing business online and over the internet has become so prevalent it may seem commonplace. However, the cyber security can turn serious if sensitive information is mishandled. Collecting credit card information and employees’ social security numbers must be kept under lock and key.
It is critical to safeguard both company information as well as client information with procedures in place to save information and to destroy sensitive account records once they are no longer needed.
Our recommendation to operators is to partner with your agent and insurance company. Discuss what you are doing and what is the best way to insure against potential claims.
On a final note, we strongly urge operators to implement premises security. Make sure the gates are locked, the lots are well lit and the buses are locked. People who come into the yard and injure themselves in some way can still file a claim, even though they may be trespassing.
This may be common sense, but companies can get so caught up in running their businesses that it falls by the wayside.
Tim O’Bryan serves as president of Service Insurance Agency. Since 1952, the company has been committed to the transportation industry. Service Insurance Agency strives to provide the most knowledgeable advice and personal service to all of its valued customers.