We require you to have a minimum of $25,000 cargo insurance...

[jelliott]

The sad part is it seems that time and time again it is the owner operator that ends up paying the price. If you are contracting with a company that is really "half" a real carrier you should REALLY think about the choices you are making.

I would love to see a list of carriers using this practice. I guarantee you the contracts with customers, brokers, carriers and shippers require far more than 25k. They are really committing fraud when they accept freight under contracts and then place it on units that are not insured to meet the contracts they have signed.

 

[davekc]

The sad part is it seems that time and time again it is the owner operator that ends up paying the price. If you are contracting with a company that is really "half" a real carrier you should REALLY think about the choices you are making.

I would love to see a list of carriers using this practice. I guarantee you the contracts with customers, brokers, carriers and shippers require far more than 25k. They are really committing fraud when they accept freight under contracts and then place it on units that are not insured to meet the contracts they have signed.

That is true. We are required to have 100k minimum. Some loads if brokered require the customer to purchase insurance if the load is valued above that. At least everyone is protected.
I scratch my head at some of these fly-by-night operations. But it usually comes to an end.
Followed by.....yep......numerous posts of drivers that got screwed out of their money because the carrier closed shop to open later under another name.

 

[Rocketman]

The sad part is it seems that time and time again it is the owner operator that ends up paying the price. If you are contracting with a company that is really "half" a real carrier you should REALLY think about the choices you are making.

I would love to see a list of carriers using this practice. I guarantee you the contracts with customers, brokers, carriers and shippers require far more than 25k. They are really committing fraud when they accept freight under contracts and then place it on units that are not insured to meet the contracts they have signed.

Seems like there would be a great sales tool/flyer in the making somewhere....for those doing it right. Pointing out the fact that a customer's freight WILL be insured properly?

 

[CharlesD]

Seems like there would be a great sales tool/flyer in the making somewhere....for those doing it right. Pointing out the fact that a customer's freight WILL be insured properly?

Good point. You have to do everything you can set yourself apart from the herd.

There are a couple other things as well that I've gotten from reading this thread.

First, if you don't have authority, the word carrier doesn't apply in any way to your business model. You're not a carrier.

Also, if you don't have authority, the people you get loads from are carriers, not brokers. They are not brokering loads to you since you don't have authority. Your relationship to them is as an independent contractor leased to a carrier, not a carrier/broker relationship. I see a lot of people without authority talking about getting freight from a broker, but that term doesn't apply in this case.

 

[davekc]

Good point. You have to do everything you can set yourself apart from the herd.

There are a couple other things as well that I've gotten from reading this thread.

First, if you don't have authority, the word carrier doesn't apply in any way to your business model. You're not a carrier.

Also, if you don't have authority, the people you get loads from are carriers, not brokers. They are not brokering loads to you since you don't have authority. Your relationship to them is as an independent contractor leased to a carrier, not a carrier/broker relationship. I see a lot of people without authority talking about getting freight from a broker, but that term doesn't apply in this case.

That is true. The closest you will get to that would be if I broker a load, I am using Panther's authority and insurance to do it. They are the actual carrier with me talking directly to the broker.
Hopefully that made sense.

 

[beachbum]

As I mentioned earlier in another thread, I am just a regular Joe Blow with one van, a "Common Carrier" as defined by Rocketman's post of "http://www.fmcsa.dot.gov/about/other/faq/faqs.aspx#question6". If I sign a contract with this company than I am defined as a "Contract Carrier" per the same FMCSA FAQ #6. Either way, as I am understanding it, and to me it can't be much clearer than what it says, that I do not need to carry cargo insurance. Here is the direct quote from the email telling me I have to have cargo insurance:

"We require you to have a minimum of $25,000. cargo insurance. in case you are
Involved in an accident to cover any cargo you may have at the time.

Please advise "

Second email reply:

"if you have our freight in your vehicle then we need to be covered in case the
freight is damaged "

Third email reply, this time from the VP of Safety:

"If you have our freight in your vehicle to deliver and it is damaged or stolen you have to have insurance to pay for the loss. Our insurance will not pay because you do not work for us."


End of quotes.
So, without being a pain in the rear and appearing to be argumentative with this cubicle person who obviously doesn't believe the link I provided (through Rocketman) and is doing what her manager is telling her to do (he/she doesn't know the FMCSA either), it might only be a minor expense to buy the cargo insurance and make the big bucks (?) with this company.

Feedback please...

Maybe you should look here and you'll find out that your not even required to register with the FMCSA..

Federal Motor Carrier Safety Administration now go to the part that says step by step help click it and answer the questions and you'll find out that your not a carrier under the FMCSA's rules.

 

[JohnMueller]

In the past I dealt with a claim where a freight broker had our insurance cert showing $250k cargo insurance. The broker's customer placed a shipment valued in excess of $3 million on our truck without notifying us, nor the broker of the actual value. The owner operator leased on to our company that was hauling the shipment parked his tractor trailer rig at a truck stop near his home overnight. You know where this is going.....

He arrived at the truck stop the next day to get into his rig and finish the load only to discover his tractor sitting there without the trailer.

During the claims process we discover the true value of the shipment. Much arguing occurred over the amount of the claim. Be informed that per FMCSA, and our great legal system, that a shipper does NOT have to inform you if their shipment exceeds the limits of your cargo policy - even though they have a copy of a current cert. You should "write" a clause into your agreements with shippers or freight brokers that it is agreed that no cargo claim shall be paid in excess of the limit listed on the cert - and that additional coverage is available, at additional cost should the freight have a higher value, which must be requested by the shipper prior to pickup of the goods at their facility.

In our case it really could have even been a scam between the shipper and their freight broker.

You can never CYA enough.

 

[ExFedEx]

Maybe you should look here and you'll find out that your not even required to register with the FMCSA..

Federal Motor Carrier Safety Administration now go to the part that says step by step help click it and answer the questions and you'll find out that your not a carrier under the FMCSA's rules.

Yep, that's what I say. The company is requiring it though, and the bottom line is if I want to haul anything for them, rather than get into a "I say/You say" game of who's right and who is ignorant of the rules, I'm going to have to get it, otherwise not haul for them. They do have four terminals, and haul nationwide. This could be good financially id I play by their rules. Darn cubicle people...

 

[Rocketman]

I believe that what everyone is trying to tell you...is that those "darn cubicle people" are correct. Not only should you be required to carry cargo liability, they should be requiring more than $25,000.

I'm not sure how you were able to take the links I posted and twist that information into you being able to haul freight without insuring it, but I'm pretty sure that you are very, very wrong with your interpretation.

 

[ExFedEx]

I believe that what everyone is trying to tell you...is that those "darn cubicle people" are correct. Not only should you be required to carry cargo liability, they should be requiring more than $25,000.

I'm not sure how you were able to take the links I posted and twist that information into you being able to haul freight without insuring it, but I'm pretty sure that you are very, very wrong with your interpretation.

Actually I understand, and am looking into it right now. It seems I'm getting two patterns of thought here though, and am trying to listen both and learn what to do. I'm actually considering going in at 100K as previously noted. What is confusing me is when I see what Beachbum posts saying that according to the FMCSA I'm not a carrier at all! Well then, what the heck am I? And when I read FAQ #6 and see that I fall into the first two definitions that are not required to carry cargo insurance, then it gets a little confusing. That is why I came here, to ask the question and glean some knowledge from those of you who have been through this. I'm just trying to cover my a** and get a paycheck.

 

[Rocketman]

It is a confusing issue, I'll give you that.

The fact that you are under 10,000 lbs gvwr is one thing that confuses the issue. Everything in the links your looking at relates to vehicles 10,001 lbs or more.

Here is the deal. It doesn't matter if your hauling somebody else's stuff in a Honda Civic or a Peterbuilt. The customer, in most cases, wants their stuff insured while it's on your vehicle. There does not have to be a regulation to require it...THE CUSTOMER DEMANDS IT! In fact, as has been mentioned, at some point there was probably a contract signed between the shipper/customer and the carrier or broker assuring the shipper that their stuff will be protected by insurance during transit. No regulation is required...the shipper DEMANDS it....they can do that!

Think of it this way. Let's say you have a little money to spend, so you go to an antiques/art auction and purchase a $50,000 painting. Let's say I am there offering my transportation services to deliver this painting.... would you like for me to have insurance on it during that transport? It is the same difference. If you are transporting someone else's stuff, they are going to want it insured.

Now...here is the catch....and likely what has you confused. If you are leased to a single carried, in most cases, that carrier will provide the cargo insurance...per contract between you and the carrier. I don't know of any regulation requiring that to be the case....it is just standard procedure. It would be quite legal (I believe) for the carrier to re-write their contracts to say that each contractor (that's you!.... and me) must provide their own cargo insurance. They could set the amount anywhere they wish. If you wanted to work with them, that's what you would have to do.

Once you make the decision to work for more than one carrier...the cargo insurance gets complicated. If your going to sign leases with multiple carriers, your going to have to have some way of being sure the cargo is insured. My suggestion would be that the contractor, in the multiple carrier scenario, should carry the cargo insurance and provide documentation of such to anyone in the chain of custody of the freight who asks for it.

 

[CharlesD]

In the past I dealt with a claim where a freight broker had our insurance cert showing $250k cargo insurance. The broker's customer placed a shipment valued in excess of $3 million on our truck without notifying us, nor the broker of the actual value. The owner operator leased on to our company that was hauling the shipment parked his tractor trailer rig at a truck stop near his home overnight. You know where this is going.....

He arrived at the truck stop the next day to get into his rig and finish the load only to discover his tractor sitting there without the trailer.

During the claims process we discover the true value of the shipment. Much arguing occurred over the amount of the claim. Be informed that per FMCSA, and our great legal system, that a shipper does NOT have to inform you if their shipment exceeds the limits of your cargo policy - even though they have a copy of a current cert. You should "write" a clause into your agreements with shippers or freight brokers that it is agreed that no cargo claim shall be paid in excess of the limit listed on the cert - and that additional coverage is available, at additional cost should the freight have a higher value, which must be requested by the shipper prior to pickup of the goods at their facility.

In our case it really could have even been a scam between the shipper and their freight broker.

You can never CYA enough.

Wow. We've never hauled anything worth more than our cargo limit, at least not that I'm aware of. 3 million seems like quite a bit. Yep, might be a scam there.

 

[ExFedEx]

It is a confusing issue, I'll give you that.

Yes it is!

[/QUOTE]The fact that you are under 10,000 lbs gvwr is one thing that confuses the issue. Everything in the links your looking at relates to vehicles 10,001 lbs or more.[/QUOTE]

Add in the fact that in this forum we have drivers that are under contract, drivers that are not under contract, drivers that are in vehicles over 10,001 lbs, drivers that are in vehicles that are under 10,001 lbs... just leads to more confusion. I went to the "Step By Step" link that Beachbum posted, and sure enough, in all 6 of those pretty pictures of vehicles, a cargo van is not one of them. Your posting of FAQ #6 I thought was pretty straightforward, and then someone else saying that I am an Independent Contractor and not even included in FAQ #6 just muddies the waters even more.


[/QUOTE]Here is the deal. It doesn't matter if your hauling somebody else's stuff in a Honda Civic or a Peterbuilt. The customer, in most cases, wants their stuff insured while it's on your vehicle. There does not have to be a regulation to require it...THE CUSTOMER DEMANDS IT! In fact, as has been mentioned, at some point there was probably a contract signed between the shipper/customer and the carrier or broker assuring the shipper that their stuff will be protected by insurance during transit. No regulation is required...the shipper DEMANDS it....they can do that!

Think of it this way. Let's say you have a little money to spend, so you go to an antiques/art auction and purchase a $50,000 painting. Let's say I am there offering my transportation services to deliver this painting.... would you like for me to have insurance on it during that transport? It is the same difference. If you are transporting someone else's stuff, they are going to want it insured.

Now...here is the catch....and likely what has you confused. If you are leased to a single carried, in most cases, that carrier will provide the cargo insurance...per contract between you and the carrier. I don't know of any regulation requiring that to be the case....it is just standard procedure. It would be quite legal (I believe) for the carrier to re-write their contracts to say that each contractor (that's you!.... and me) must provide their own cargo insurance. They could set the amount anywhere they wish. If you wanted to work with them, that's what you would have to do.

Once you make the decision to work for more than one carrier...the cargo insurance gets complicated. If your going to sign leases with multiple carriers, your going to have to have some way of being sure the cargo is insured. My suggestion would be that the contractor, in the multiple carrier scenario, should carry the cargo insurance and provide documentation of such to anyone in the chain of custody of the freight who asks for it.[/QUOTE]

Bottom line, it looks like (if I am to continue in this and expand as I am trying to do) it is best all around if I, and others like me, just go out and get cargo insurance, that way we have it and can provide documentation of it, and off we go!

Thank you everybody for the information, the links and the comments, and I hope other readers can learn from this thread and hopefully it will clear up some of the confusion.

 

[beachbum]

Try progressive for Cargo or any other company you want. here's the link. I don't know their requirements, but give them a call.



Motor Truck Cargo Insurance - Progressive

 

[ExFedEx]

Try progressive for Cargo or any other company you want. here's the link. I don't know their requirements, but give them a call.



Motor Truck Cargo Insurance - Progressive

Excellent, thank you!

 

[Rocketman]

CIS is an EO sponsor and I believe they sell Progressive. CIS gets a lot of great reviews and they understand our industry. I would definitely give them a shot at it. I have had Progressive insurance before but never had to file a claim with them so I can't speak on that. I found them easy to work with otherwise.

I do agree with your final assessment. If your gonna go out on your own, man up and get the cargo insurance. It will be so much simpler...... you and your customers are protected.