Auto Exposures in Construction Captives: Strategies and Services to Reduce Loss and Improve Program Performance

In the construction industry, vehicles are more than just transportation, they’re operational assets critical to project delivery. From hauling materials to moving crews between jobsites, work trucks, vans, and utility vehicles are indispensable. But with this reliance comes risk and auto exposures can be a major source of loss. For companies with a captive insurance program, managing these risks proactively is essential to protecting capital, optimizing retention, and ensuring long-term program viability.

The Risk Landscape

According to the National Safety Council, in 2023 there were 898 deaths and 40,170 injuries in work-zone crashes; and according to the Center for Construction Research and Training, between 2011 and 2020, the construction industry experienced:

• 2,600 fatal transportation-related injuries
• 35,000 nonfatal transportation-related injuries among private wage-and-salary construction workers

Key contributors include:

• Roadway collisions (48% of nonfatal injuries; 29% of fatal injuries)
• Pedestrian vehicular incidents (30% of fatal injuries; 17% of nonfatal injuries)

These statistics highlight the frequency and severity of auto-related losses, which can significantly impact a captive’s loss ratio and surplus if not properly managed.

Auto Exposures in Construction Captives

Auto exposures pose unique challenges for construction captives that can impact safety, program performance and financial outcomes. Auto exposures in construction captives can be amplified by:

• Limited Fleet Oversight. Without centralized fleet management, captives may face inconsistent maintenance records, unclear driver accountability, and increased claims frequency.
• Driver Behavior. Untrained or unmonitored drivers can lead to preventable losses. Personal use of company vehicles further complicates underwriting and claims defensibility.
• Jobsite Hazards. Navigating congested urban zones or remote rural sites increases exposure to unpredictable traffic and environmental risks.
• Vehicle Security. Theft of vehicles and equipment can result in large claims and erode captive profitability, especially if coverage limits are exceeded.
• Regulatory Compliance. Non-compliance with DOT, FMCSA, or insurance regulations can lead to fines and reputational damage, risks that captives must account for in their governance.

The Benefits of Risk Management for Captives

Auto exposures are managed differently when companies are part of a captive because the captive structure gives them more direct control over risk management and claims handling. Instead of relying on standard insurance solutions, companies can tailor policies, set their own safety standards, and invest in loss prevention strategies that fit their unique operations. This flexibility encourages a stronger focus on long-term risk reduction, cost savings, and accountability—ultimately helping captives to better align insurance practices with their business goals.

• Preserve surplus
• Improve underwriting performance
• Support reinsurance negotiations
• Enhance regulatory and board reporting

Key Services to Optimize Captive Fleet Programs

Fleet Safety Program Development

Risk Engineers collaborate with captive owners to build scalable fleet safety programs, including:

• Driver qualification standards
• Maintenance protocols
• Personal use policies
• Incident reporting procedures

These programs help reduce claims and support actuarial modeling.

Driver Training & Telematics Integration

• Defensive driving courses tailored to construction
• Behavior monitoring via telematics
• Coaching for high-risk drivers

Telematics data can be used to predict loss trends, support loss control funding decisions, and justify reserve adjustments.

Jobsite Transportation Assessments

On-site evaluations identify:

• High-risk routes
• Safe staging areas
• Opportunities to reduce travel

These insights help captives quantify exposure and target mitigation investments.

Theft Prevention Strategies

• Locking and key control protocols
• GPS tracking for vehicles and equipment
• Secure parking recommendations

These measures reduce frequency and severity of theft claims—critical for captives with high deductibles or limited coverage layers.

Incident Investigation & Trend Analysis

Root cause analysis and trend identification, enabling captives to:

• Adjust underwriting assumptions
• Refine risk retention strategies
• Inform board-level risk discussions

Captive Impact: A Real-World Scenario

For a construction firm with a captive that insures its auto fleet, two incidents in six months - one due to distracted driving, another from poor tire maintenance - can result in $75,000 in losses. These claims hit the captive’s retention and reduce surplus.

When a captive takes risk improvement action, they could reduce or prevent the risk by:

• Implementing driver safety training
• Establishing proactive maintenance protocols
• Using telematics to monitor and correct risky behavior

The result? Fewer claims, better loss ratios, and stronger captive performance.

The Bottom Line - Value of Risk Management for Captives

Auto exposures are a controllable risk—and for construction firms within captives, they represent an opportunity to drive down loss costs, improve capital efficiency, and enhance program sustainability. Zurich Resilience Solutions offers the tools, expertise, and data to help captive owners take control of their fleet risks and unlock long-term value.

Whether you're forming a new captive or optimizing an existing one, Zurich Resilience Solutions can support your journey with customized fleet safety strategies that align with your captive’s goals.

To learn more about Zurich Resilience Solutions Captive Risk Management services, visit https://us.zurichresilience.com/captive-risk-management

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