Risky Business

Addendum to this months Expedite Now Article

Hi Everyone,

In this month's Expedite Now, you'll find my article, Do you have an extra $1 Million in the bank?

This blog is an addendum to that article, which is short due to size constraints.

NTL/PD insurance policies for Expediters are pretty straight forward, they've been around for years for those Owner Operators hauling for or leased on to just ONE Motor Carrier...the Traditional Structure.

When the "Multi" or nonexclusive contract evolved in Expediting, the insurance coverage needed to be totally different.  For starters, a "Multi" cannot have NTL (NonTrucking Liability), he must have PRIMARY Commercial Auto Liability.

That PRIMARY Commercial Auto Liability also needs to be "Non-Contributory" in it's policy language or contract with an Owner Operator.

If it's not structured correctly as a Primary Non-Contributory policy, then the insurance company is within their rights to deny claims per their contract to search for coverage with the Motor Carrier in event of a claim.

It is your responsibility to disclose the business operations of the vehicle use in the application for any insurance process.  The agent and the insurance company must be fully aware of the use(s) of the vehicle before they determine if they provide a policy with the proper CONTRACT LANGUAGE that covers the exposure.   

I can't emphasize enough the importance of the "Primary Non-Contributory" language in the policy contract.  So many times I hear, "Just make sure it's Unlimited Radius."  This is just not correct.  An "Unlimited Radius" policy without "Primary Non-Contributory" is no contract at all.  It will not trigger as First Pay regardless of the radius.

You, as the Named Insured, also has the obligation to disclose all exposures of any "material change in risk" during a ANY policy period.  Since Expediting is not typical trucking OR local parts delivery, many insurance companies do not have coverage that is designed CONTRACTUALLY for the multi risk. 

Everyone must be on the same page in order for a loss to "trigger" insurance correctly in the event of a loss.

If you operate as a "Multi" Owner Operator, contracted with one or more Expediting Motor Carrier companies I suggest you describe your coverage needed as follows:

"Expediting is defined as the transportation of time-sensitive freight, which is often delivered on a just-in-time basis.  This is "Over The Road", or "Long Haul Transport" requiring Broad Form Cargo coverage for commodities in the U.S. and Canada.

As an Independent Contractor Owner Operator under contract to multiple Motor Carriers, the insurance requires Primary Non-Contributory Commercial Auto Liability and Cargo.   

This means the insurance company insuring you will NOT FIRST seek coverage with the Motor Carrier you are hauling the load for....AND will respond to your RIGHTS to the CARGO you are holding VS the Standard Bill of Lading from Shipper to Motor Carrier.

Standard accepted coverage for Expediting is $1 Million Commercial Auto Liability and $100,000 Cargo with a maximum $1,000 deductible with an Unlimited Radius of operations.

The Additional Insured designation on this Primary Non-Contributory policy for Liability AND Cargo protects the Motor Carrier, offering access to the policy and 1st dollar defense.

The Agent or Agency you choose should provide policy monitoring services to the Motor Carrier that includes PRIOR notice of cancel for pending Non-pay of premium, and immediate notice for any change in coverage...both via time sensitive email.

At this time, the following companies do not offer this required coverage:

Allstate
Auto Owners
American Family
Erie
Farmers/MidCentury
Geico
Grange
Nationwide
Sagamore
State Auto
State Farm
Travelers

After a loss is no time to find out your were not properly covered.

Shelly Benisch, CIC            [email protected]     www.MyCISagent.com