Insurance Question

[Michael Ludwig]

His "State of the Union" post is by far one of the most valuable posts here, especially in times of insurance crises (crisis' ?), such as the one carriers face right now. To be honest, those of us that read it (and confirmed it with our own advisors) are ahead of the game because of it.

But, let's not get off track here ...

In my opinion this is an important thread for people like @Trans to gain industry knowledge, and figure out how and where they can make their operations better, or even legal in some cases, and where maybe they should and should not be spending their hard earned money.

 

[44000lbs]

Hello Fellow Experienced Carrier / Brokers,
We are a freight brokerage. My customer has a demand, they need (commercial general liability, non - owned automobile, and automobile liability) of $5Million for their outbound loads 2-3 daily.

Product value $50,000USD

Most of the carriers have $2M in coverage. Can you advise as a brokerage how can we cover that? If not, recommend a solution please. Thank you so much!

 

[TRKINSURE]

Hello Fellow Experienced Carrier / Brokers,
We are a freight brokerage. My customer has a demand, they need (commercial general liability, non - owned automobile, and automobile liability) of $5Million for their outbound loads 2-3 daily.

Product value $50,000USD

Most of the carriers have $2M in coverage. Can you advise as a brokerage how can we cover that? If not, recommend a solution please. Thank you so much!

Hi Johnny, are you looking to insure a single shipment? Most insurers will have an online portal which you can report a shipment and insure it to value. The alternative is to call the broker as that same insurer will usually have a “house account” with the insurance broker and that individual can price out the shipment.

if your customer insists that they need auto liability you might want to have a clearer explanation that you are a nonasset based carrier

pM me if you need to talk on the phone and I’ll give you my number.

 

[loaders]

Call Marsh Canada. They know transportation and we have used them to insure our brokerage operation for the last few years. As a freight broker you should have some contingency cargo coverage. Adding some additional liability insurance shouldn’t be a problem, we had to do the same for one of our clients. Being able to offer your customer “peace of mind” is invaluable and will enhance your standing. Being able to show that you are different from all the other guys is good marketing.

 

[TRKINSURE]

Hey Scott, did Mike tip ya off about who I was? And I prefer to remain as anonymous as possible. Obviously with my “hold no punches” comments on these topics, my fellow insurance carriers would likely not look kindly at some of the things I say.
but you guys (trucking carriers) pay my bills.. not them. Having said that, I still need to maintain business relations, so let’s sweep that under the rug.
@ScottN I can honestly say that since day 1 I’ve had nothing but respect for you. Your reputation is seldom matched and you built a machine that fed you business, I saw the success in that and duplicated it.
much respect!

 

[Michael Ludwig]

Hi Johnny, are you looking to insure a single shipment? Most insurers will have an online portal which you can report a shipment and insure it to value. The alternative is to call the broker as that same insurer will usually have a “house account” with the insurance broker and that individual can price out the shipment.

if your customer insists that they need auto liability you might want to have a clearer explanation that you are a non-asset based carrier

pM me if you need to talk on the phone and I’ll give you my number.

The alternative is to find carriers with 5 mill coverage. However, if your customer wants to be added to the policy in any way, shape, or form, especially as an "additional insured, that is likely never going to happen.

In my experience, customers that "need" to be added to a carrier's policy as an additional insured, are usually considerably more trouble than they are worth. They typically have an inflated sense of their own value, and usually have exceptionally poor legal advice which leads to these types of requests. Alternatively, they are outright scammers.
In the types of cases my own personal rule of thumb is to "Run the f**k away. Fast. really fast.". But, that's just me. Your mileage may very

 

[Jim L]

Hello Fellow Experienced Carrier / Brokers,
We are a freight brokerage. My customer has a demand, they need (commercial general liability, non - owned automobile, and automobile liability) of $5Million for their outbound loads 2-3 daily.

Product value $50,000USD

Most of the carriers have $2M in coverage. Can you advise as a brokerage how can we cover that? If not, recommend a solution please. Thank you so much!

The question is why does this shipper need CGL of 5Mil? What do they think they need to be protected from? It is really hard to see how a substantial liability claim to the carrier could eventually be filtered down to the shipper.
I think your customer doesn't know what they're talking about and the person they put in charge to get quotes just passed those numbers on.

 

[bubba-one]

Ask Arcelor Mital (Dofasco) why you need 5 mil to set foot on their property with a truck, and you'll have the answer. When they have there own roads in the plant and some driver should ever loose control! The damage that could be caused could far out weigh the 5 mil requirement.

 

[loaders]

We have found the most large, multinational shippers are requiring 5M liability CGL. I would assume they are trying to get as much protection as possible in the event of a catastrophic accident, especially after the SK bus crash and other accidents occurring in the US.

 

[Jim L]

We have found the most large, multinational shippers are requiring 5M liability CGL. I would assume they are trying to get as much protection as possible in the event of a catastrophic accident, especially after the SK bus crash and other accidents occurring in the US.

But did a claim make it to the peat moss shipper in the Humboldt accident? I highly doubt it and if one was attempted the plaintiff would have a very hard time proving that the shipper was culpable and responsible for the crash.

I wish that there would be more onus on the shipper/beneficial freight owner - maybe then we would have more stability in the market with freight.

 

[Freight Broker]

My large fortune 100s all require 5M at least. What a change from decades ago.. started with them 20+ years ago and they didn't require brokers to have any insurance at all. But the 5M cull the herd so to speak.. can't just call them now and expect to get in without dotting a lot of i's and crossing a lot of t's.. which is good for keeping competitors out.

 

[loaders]

Jim L, you are correct and I was mistaken to have used the Humboldt accident as an example as it occurred here in Canada. The problem arises more in the US with virtually limitless settlements as a result of motor vehicle accidents. The plaintiffs will go up and down the chain of involved parties searching for the ones with the largest pockets. In the case of large corporations, they become the targets, after draining the carriers insurance policy, the brokers insurance policy (if one was involved in the transaction) and basically anyone else who may have touched the shipment or the truck that was carrying it. Purchasing and maintaining a 5 M CGL policy is vastly preferable and cheaper, than offering complete, unlimited indemnification to a customer, which by the way, some are asking for.

 

[Jim L]

Jim L, you are correct and I was mistaken to have used the Humboldt accident as an example as it occurred here in Canada. The problem arises more in the US with virtually limitless settlements as a result of motor vehicle accidents. The plaintiffs will go up and down the chain of involved parties searching for the ones with the largest pockets. In the case of large corporations, they become the targets, after draining the carriers insurance policy, the brokers insurance policy (if one was involved in the transaction) and basically anyone else who may have touched the shipment or the truck that was carrying it. Purchasing and maintaining a 5 M CGL policy is vastly preferable and cheaper, than offering complete, unlimited indemnification to a customer, which by the way, some are asking for.

I understand the concept and the risk that you are inferring to but then there is no ceiling that a CGL policy can cover. 5M/10M/50M may not be enough in the worst case scenario. Regardless most lawyers for shippers in the current landscape can easily get removed from any claim as they can prove they had very little to nothing to contribute to the incident that led to a loss. As for complete indemnification that will never happen - you cannot contract that out. You can contract who is responsible to pay for legal representation and maybe cover indemnification but if you're already past insurance limits who would want a 3rd party representing your interests and do you really think they'll cover indemnification when they carrier has been taken to the cleaners?

 

[loaders]

I would tend to disagree Jim L. Although a good lawyer will try to get their shipper client removed from any proceedings, it has been and still is, successfully argued that the shipper, as the party who selected the carrier involved in the accident, is a significant party to the loss. The plaintiff would argue that the shipper is negligent because they hired a shitty carrier. The shipper had a bad vetting process or selection criteria.

 

[Jim L]

I would tend to disagree Jim L. Although a good lawyer will try to get their shipper client removed from any proceedings, it has been and still is, successfully argued that the shipper, as the party who selected the carrier involved in the accident, is a significant party to the loss. The plaintiff would argue that the shipper is negligent because they hired a shitty carrier. The shipper had a bad vetting process or selection criteria.

Maybe, but I have not heard one BFO that has been implicated. A very few brokers here and there mostly because they made a huge mistake 'forcing' the company to drive illegal by implying non payment and such unless the load is there on time but there was evidence of this via email or text.