What happened to Eclipse Expediting?

jjtdrv4u

Expert Expediter
Quick question.
We are one of those carriers that try to do everything legal. Oh my God how complicated that is... BUT coming back to the topic at hand... We currently have only scheduled vehicles on the policy, all company owned. I asked my insurance agent what would we need to do to work with independent contractors owner operators. I gave them the insurance that OO currently holds. They said it costs me $300/year per vehicle with minimum policy $1,500. The OO usually work with 2-4 carriers. So the $300, even if passed on to them, is almost nothing. So why are you saying the model will dissapear? Is my insurance wrong?

you are getting a lot better deal on the insurance than your owner operators would get if they paid for it, and yes, your insurance is probably wrong, based on $300 per year, that is unheard of.
 

davekc

Senior Moderator
Staff member
Fleet Owner
The tricky part is providing the right information. As more information becomes available, more will find a way around it. Seems to be the case. 300 a year doesn't sound like the right kind of policy. Sounds like a basic auto policy.
 

OnMyOwn

Rookie Expediter
A long post but here is the insurance's full reply, taking out only our name and state:

"If you would like to use IC’s with their own insured vehicles for your business, we could add a $1M Hired & Non Owned Auto Liability policy for you. This would protect XXX in the event one of the IC’s got into an accident and XXX was named in a suit because the driver was working on your behalf at the time of the accident. Here’s some details on the policy & the requirements:


· Each IC applicant would need to sign an IC Agreement, agreeing to hold XXX Harmless and agreeing to the minimum insurance requirements of the program. A sample Agreement is attached for your use, but you can change this to fit your needs as long as the HH Agreement & Ins req are retained.


· The minimum insurance requirements for the van (light gvw) drivers would be $100,000 per person/$300,000 per accident. You would need to collect a current auto liability insurance declarations page from the driver upon contracting with them. Then, you would need a system in place to have a current dec page on file each year thereafter. They can carry higher limits than those mentioned, but those are the minimum. If you use drivers with larger gvw vehicles, the requirements change, so let me know if you are considering that & I can give you the details.


· You would need to run a current MVR on the IC Applicant to make sure they meet the MVR program eligibility. You could ask the IC to obtain a current MVR from the local DMV, as well. I’ve attached the MVR guidelines for your review.


The policy is rated on a per driver cost. The aprox. cost for a light IC driver in YY is $325.00 annual. The policy would have a minimum premium of $1500 annual (+surplus lines tax & a co. fee). "


So no, it is not an auto policy. I'd still like to hear your thoughts.
Things just do not jive. And I believe the reason they are not is actually the insurance company 90% of the IC and small MCs are using - Progressive. Step away from them and I think you can find reasonable alternatives for the same business model (truth being said, not many).
I don't think I was the first person ever inquiring about this to this insurance company, and them, not being aware of risk, priced it wrong. Rather they actually do what's supposed to be done, linking everything back correctly to the IC's insurance, making sure that is the policy that pays in case something were to happen.
 

golfournut

Veteran Expediter
A long post but here is the insurance's full reply, taking out only our name and state:

"If you would like to use IC’s with their own insured vehicles for your business, we could add a $1M Hired & Non Owned Auto Liability policy for you. This would protect XXX in the event one of the IC’s got into an accident and XXX was named in a suit because the driver was working on your behalf at the time of the accident. Here’s some details on the policy & the requirements:


· Each IC applicant would need to sign an IC Agreement, agreeing to hold XXX Harmless and agreeing to the minimum insurance requirements of the program. A sample Agreement is attached for your use, but you can change this to fit your needs as long as the HH Agreement & Ins req are retained.


· The minimum insurance requirements for the van (light gvw) drivers would be $100,000 per person/$300,000 per accident. You would need to collect a current auto liability insurance declarations page from the driver upon contracting with them. Then, you would need a system in place to have a current dec page on file each year thereafter. They can carry higher limits than those mentioned, but those are the minimum. If you use drivers with larger gvw vehicles, the requirements change, so let me know if you are considering that & I can give you the details.


· You would need to run a current MVR on the IC Applicant to make sure they meet the MVR program eligibility. You could ask the IC to obtain a current MVR from the local DMV, as well. I’ve attached the MVR guidelines for your review.


The policy is rated on a per driver cost. The aprox. cost for a light IC driver in YY is $325.00 annual. The policy would have a minimum premium of $1500 annual (+surplus lines tax & a co. fee). "


So no, it is not an auto policy. I'd still like to hear your thoughts.
Things just do not jive. And I believe the reason they are not is actually the insurance company 90% of the IC and small MCs are using - Progressive. Step away from them and I think you can find reasonable alternatives for the same business model (truth being said, not many).
I don't think I was the first person ever inquiring about this to this insurance company, and them, not being aware of risk, priced it wrong. Rather they actually do what's supposed to be done, linking everything back correctly to the IC's insurance, making sure that is the policy that pays in case something were to happen.

I don't see any mention of bobtail insurance that carriers require o/o to have. Is this insurance for a multi carrier model or o/o exclusive.

I guess what I'm not clear on is who's mc # is it?

Lastly, the producer is using a "surplus lines" company. Meaning they are not licensed in your state, therefore don't follow form or fee schedules of your state.
Now this isn't a bad thing, but it could be. You would need to investigate the insurer and also check the producer to make sure they have verified the financial stability of the insurer.
 
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OnMyOwn

Rookie Expediter
The bobtail portion of the insurance comes into play only if the liability insurance is provided ONLY by the MC, like in the cases of leased units to Panther or Fedex (exclusive use). Bobtail insures that when a unit not in service gets into an accident, the MC's insurance does not dinged.
In our situation the IC would carry his liability insurance. And even when running under our MC, our insurance wants to make sure the IC's insurance will pay, not them. They charge me only to allow me to use a hired non-owned truck. The liability portion is not on us.
 

jjtdrv4u

Expert Expediter
The bobtail portion of the insurance comes into play only if the liability insurance is provided ONLY by the MC, like in the cases of leased units to Panther or Fedex (exclusive use). Bobtail insures that when a unit not in service gets into an accident, the MC's insurance does not dinged.
In our situation the IC would carry his liability insurance. And even when running under our MC, our insurance wants to make sure the IC's insurance will pay, not them. They charge me only to allow me to use a hired non-owned truck. The liability portion is not on us.

the law requires a minimum of $750,000 in primary auto liability in the for hire transportation business, and most brokers and carriers take this a step further to $1 million, also they require $100,000 in cargo insurance; sounds like your insurance guy is not in the same ballpark as the rest in the expedite insurance business.

let us know if you can get any carrier/broker contracts signed without these requirements, and if so, we all would like to sign up with your insurance guy.
 

jelliott

Veteran Expediter
Motor Carrier Executive
US Army
Problem is the carrier/broker doesn't and can't see the sub policies and what units are actually covered for. It also doesn't insure the sub units have correct type of coverage (interstate, freight, not delivery, mileage radius etc). This is EXACTLY the very problem that we are talking about. :arghh:
 

jjtdrv4u

Expert Expediter
I see what you are saying, and I have never seen a problem that good ole American ingenuity can not solve.
When all the powers at be really want to solve it, they will. It may require putting the insurance lobby, the trucking lobby, and the FMCSA all together in a room, and let them come up with it, but it can be done, one way or another.

I know a guy that can not hardly put two sentences together using the king's english, but he can write code to solve any computer program and app problem. This would be a piece of cake for the computer geeks. Sometimes you have to think out of the box to get something done.
 

jelliott

Veteran Expediter
Motor Carrier Executive
US Army
Almost seems like it comparable to cyber hackers. Every time you come up with a way to catch cheaters....they figure out a way around it. Really frustrating. It used to be agents themselves would police this and would never almost conspire on it. But sadly the industry has changed.
 

OnMyOwn

Rookie Expediter
I think there is a misunderstanding. I am not trying to cheat, exactly the opposite. You all said it was too expensive for carriers to add correct coverage for ICs. And all I said was I have an April 2015 quote for $325/IC. If that IC has on his own correct coverge as requested 1M, what is the issue then? One thing brought up was the interstate issue. My policy knows I do interstate, all long miles drive, all lower 48. Then I request to add the IC and these were their requirements. I would think if their requirements are wrong, they would get stuck with the claim.

And just to clear the air, we decide not to do it and stick to our business model, but I think it's still doable - outside Progressive.
 

jelliott

Veteran Expediter
Motor Carrier Executive
US Army
Here are some of the issues pointed out to me by our insurance providers and attorneys: I am just going to cut and paste some parts to give you the idea of it. Lawyers can be very long in emails, lol.

"If you would like to use IC’s with their own insured vehicles for your business, we could add a $1M Hired & Non Owned Auto Liability policy for you. This would protect XXX in the event one of the IC’s got into an accident and XXX was named in a suit because the driver was working on your behalf at the time of the accident. Here’s some details on the policy & the requirements:

What that means is your Hired Auto policy will only kick in after a lawsuit is awarded. By that time, the Broker or Shipper are pulled into the lawsuit as well. How about the rest of us who simply buy the right insurance that pays the claim right away as promised without a lawsuit?

Each IC applicant would need to sign an IC Agreement, agreeing to hold XXX Harmless and agreeing to the minimum insurance requirements of the program. A sample Agreement is attached for your use, but you can change this to fit your needs as long as the HH Agreement & Ins req are retained.

Good luck on hold harmless when the IC didn’t necessarily disclose his true operations and radius in order to get cheaper insurance.

The minimum insurance requirements for the van (light gvw) drivers would be $100,000 per person/$300,000 per accident.

As a motor carrier, you’re promising everyone $1,000,000 on your Certificate. This is expected to be on anyone hauling for you. So IF the policy IS correct on the IC, who pays the extra $900,000? Apparently there would need to be a lawsuit to hopefully trigger the Hired Auto to pay. Again you signed a contract knowing coverage was not truly there......

You would need to collect a current auto liability insurance declarations page from the driver upon contracting with them. Then, you would need a system in place to have a current dec page on file each year thereafter.

So let’s assume that IC gives you a Dec page with $1 Million. Who verifies it will pay first as you need it to?

“Each year” is a long time. Who monitors that he changed his coverage to even lower limits during the year? How do you know his policy is cancelled because he didn’t pay it? 30 days waiting for snail mail?

Bottom line is it is a far less secure and MUCH higher risk for shippers, carriers and brokers. It is completely unregulated for the most part out there. VOI is helping but it is just a piece. Our insurance providers (with our contingent coverages on our brokerage) and attorneys are confident we can and would be pulled into a major lawsuit at some point. So what do we do to protect our company? We have to make some very hard choices about who and what business structures we will do business with. We should not be assuming much greater risk simply so a carrier can run for a lower cost with "possible" coverage at all levels. We worked hard like a lot of people on EO to build our business and I sure as heck want to protect it and our people.
 

OnMyOwn

Rookie Expediter
Understood. I appreciate the expert's input and I hope he's on your payroll :) Or should I get ready for the invoice?

So in theory, a broker who really cares, who does not want to be dragged into lawsuits and who does right by the shippers and right by the carriers, would only work with carriers that have only one box checked: "scheduled autos". But I know of only one that does.

I honestly think carriers were just trying to make some kind of margin, let's be honest, who gets the load? the cheapest bid. Who is in charge of picking that bid? The broker. We had very good relationships with brokers because we choose good drivers, have 24 H dispatch, have gps tracking on all trucks, have updates on freight every 15 minutes. And all of a sudden, less and less freight. Mind you the rates are the same. So we asked what happened. We are not competitive anymore. We are expected to take less and less each day and sometime from brokers who we know for a fact re-broker freight. Very, very frustrating. And that broker expects us, the carrier, to carry all the liability, who does nothing but goes higher and higher every year. Something will have to give eventually, and I don't think the problem lies with the carriers alone.

And as a side note, Fedex CC makes it mandatory for carriers to have Hired Not Owned coverage. Go figure... Took a long time to explain that one to our insurance...
 

FlyingVan

Moderator
Staff member
Owner/Operator
In my opinion, the mighty Dollar speaks louder than common sense. I bet lots of brokers choose to close their eyes, hope for the best and pocket an extra $50 or more on every load. If they stop giving loads to the companies that are running without proper insurance the rate might go up, so less profits for them.
 
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OntarioVanMan

Retired Expediter
Owner/Operator
actually rates have not come down....only the FSC has dropped as it should....I see LTL is about 10.5% yesterday last year it was around 30%......80-90 is about right for a CV on average.
 

jojosilver

Rookie Expediter
I will not carry tales on what I heard about the original topic. ___ what happened to eclipse. I can tell you of an individual who could answer that try OF trucking and talk with Richard colbert.
 
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