Risky Business

Multis - The Good, The Bad and The Uglies - Owner Ops

This is part 2 of a 3 part series on the “Multi” – Today’s focus, the Owner Operator end

Hi Everyone,

Two Days ago I started this blog series on the “Multi”, with the focus on the “Motor Carrier end”.   If you haven’t already, please read that blog first for the ground work for today’s blog on the “Owner Operator end”.

“The Good, the Bad and the Uglies” is an equal opportunity choice for Motor Carriers and Owner Ops alike when it comes to Insurance.

First the “Good”…and I want to stress that the vast majority of you ARE Good…

 

The Good Owner Op knows he is first and foremost a Small Business Owner, and it’s his obligation to maintain insurance that matches what he does…Expediting. He knows that if he chooses to haul for more than one Motor Carrier, he has an obligation to provide correct insurance to the Motor Carriers as promised in his contract. (…Similar to the plumber, carpenter or electrician subcontractor who work for more than one General Contractor.) By “correct insurance”, he understands that “Unlimited Radius” coverage and “Additional Insured” are the least of his worries.   He understands if he does not fully disclose his operations of his “Multi” status to the Insurance Company, he has purchased the wrong insurance…then that insurance contract won’t “trigger”, or pay “first” or “primary”.   (When he’s hauling under another MC number, his lease agreements will supersede the insurance contract, which obligates them to pay “excess” or “second” on most policies where an MC number is in play.) The Good Owner Op knows that as a small business owner, he is steady, reliable and truthful if he wants to remain in good standing with his Motor Carriers and their Shippers.   He would never reduce coverage on his Liability and Cargo after the Certificate was issued for any reason, because he knows his Motor Carrier(s) would be on the line when the resulting inevitable gap in insurance pops up on a claim. The Good Owner Op takes the time to research the Motor Carrier(s) he chooses to sign on with, and he’s smart enough to know that leasing on with any more than 2 or possibly 3, just runs down his own rates. The Good Owner Op understands that the lease agreement they sign with a Motor Carrier is a contract.   He reads it, understands what he’s signing regarding his insurance responsibilities and respects the agreement.

 

Now the “BAD”…

The Bad Owner Op is usually the guy who misrepresents what Expediting IS, or tries to reduce his coverage in a less than forthright manner: 

The Owner Op who was a subcontractor in construction with an existing Inland Marine policy for “Tools & Equipment” or other large equipment…that he’s now passing off as Motor Truck Cargo on the Cert.  He doesn't have true Cargo, and he definately doesn't have "Trucking for Hire" for Liability.   Sometimes the agent is in on it, sometimes they’re not (God knows there are also “BAD Agents”, LOL) The Owner Op who misrepresents his “State Farm” or similar policy as “Business Auto”, versus “Trucking for Hire”.   When the claim occurs, the insurance companies then see the fraud, most deny the claim, and then take appropriate action for the insurance fraud. The Owner Op who insists on decreasing his coverage whenever he thinks "he's not using it" by calling the unsuspecting Progressive Customer Service Rep at night, the girl who doesn't have a clue what Motor Carriers require in Expediting.   (This would be like the electrician taking his insurance off every day he doesn't have a job, it's ridiculous.)

And the “UGLIES…

 

I can honestly say that if there are many of you out there on the Owner Operator end, I don’t often catch you.    Examples that come to mind that I HAVE run across include:

The Owner Op who purchases NonTrucking Liability and misrepresents it as Primary Liability.   His policy won’t pay out on a claim under the Multi structure, causing severe problems for the Motor Carrier. The Owner Op who misrepresents himself as a Courier hauling for 1 entity on a local radius, buys $10,000 in Cargo but needs $100,000 in Cargo…so he adds a zero to the Cert.   Certs are not legal documents (can you see why?)   It’s the actual coverage on the policy that pays out on a claim. The Owner Op hiding drivers, could be the brother, the son…anyone who increases his rate.   He thinks the policy will pay out no matter what, and this is incorrect. The Owner Op who insists his contract is “special”, and he doesn’t have to have the same coverage as anyone else.   (Yes, this is a true story.) The Owner Op who bullies his Motor Carrier(s) Safety Person on his coverage, without the full knowledge of the intricacies of what it takes to MAKE it safe. The Uglies are the ones that lie to Insurance Agents/Companies, Motor Carriers and anyone else to gain an advantage.

CIS/Progressive loves “Good” Expediting Owner Operators.   The vast majority are honest, hardworking, patriotic people that are a joy to work with for everyone in our office.

On my next blog Friday, I’ll talk about the Pros and Cons of the “Multi” model vs the “Traditional” model, as well as something new on our radar, Motor Carrier “Hybrids”.   I’ll also talk about why I started this blog trilogy, and my ultimate goal for Owner Ops in our Expediting Community.

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