Last year, ARA Insurance preferred agent Tom Rensch, CIC, managing partner, TR Risk Solutions, St. Louis, saw plenty of conversion theft claims — more than auto claims. He also has dealt with equipment damage claims, and cybersecurity is another big industry issue. That is why he continues to work closely with his clients to make them aware of the problems and to implement policies that address them.
Reducing theft, particularly theft by conversion: Rensch put together a “Counter Measures” presentation, which covers what counter personnel can do to help prevent theft. “The things they thought would be OK — just getting a driver’s license and credit card information — are not the only ways to vet people, particularly those from out of state. When someone comes from out of state, you should immediately go to the next level of the vetting process,” he says.
That means training personnel to not be overly concerned about the rental revenue when it comes to vetting customers. “Thieves are coming in with the intent to steal. Rental operators have to vet them, getting more information such as vehicle registration and auto ID cards. If renters are renting and hauling equipment, rental operators have every right to ask if they have auto coverage. If they don’t, don’t rent to them. Look past the rental revenue because it is a bigger deal when the equipment doesn’t come back,” Rensch says.
To protect their equipment, rental operators need to ask questions as well as take photos of the vehicle identification numbers (VINs), license plates and even the renters, he notes.
Reducing equipment damage claims: “I think a lot comes down to what rental operators and their employees are doing at the time of rental to prepare their customers to operate that piece of equipment,” Rensch says.
“Find out where customers will be operating your equipment. If they will be by water, ask what they plan to do with the equipment. Don’t assume a customer knows how to operate it even if the customer has rented that equipment from you before. I tell my rental clients to blame it on their insurance. Let the insurance company be the bad guy. Rental operators also can do some risk transfer by getting certificates of insurance,” he says.
Reducing auto claims: “This past year I have had claims for rear-end accidents, sideswipes and for when the driver backed into fences, gates and other vehicles,” Rensch says.
To remedy that, Rensch pushes safe driving habits. “Drivers shouldn’t drive distracted. They need to put their phones down. They shouldn’t eat lunch while driving. Remember that a loaded vehicle is totally different than an unloaded one. Drivers need to give themselves plenty of room to stop and be extra careful in heavy traffic. They need to drive defensively and pay attention to everyone around them. When they deliver equipment, they shouldn’t just whip in. They need to look at ingress and egress to safely navigate where they are dropping it off. They need to avoid backing up the trailer, if they can, and if they have someone with them, have that person spot them,” he says.
Reducing cybersecurity threats: “Approximately 38 percent of businesses will be hit with a ransom attack, with the average claim being $287,000. Sixty-two percent of companies that have a claim go out of business, and the average time that someone is in your system before you even know it is four months,” Rensch says.
“When you start talking about it in those terms, people start thinking about it. This is a coverage that small businesses think they don’t need, but this will become every company’s largest risk. ARA Insurance’s cyber coverage is a huge benefit. Rental operators also need to make sure their employees are vigilant and know they play a huge role in preventing ransom attacks,” Rensch says.
It’s all about “getting a handle on these exposures,” he says. “Rental operators have to realize that insurance is about their experiences and also about the experiences of everyone else. That means working together to understand the risks and follow practices that will help reduce claims.”