Question
In furthering my research, I'm contemplating occasionally "broker carrying" or "trip leasing" with companies such as: Landstar, CH Robinson, and Mercer etc.
I've noticed that these companies want to be listed as "additionally insured" on your policy.
A) Would your insurance company have a problem with this?
B) Would your insurance company have a problem with 2 or more of the above (but not limited to the above) companies?
1) I ask this because let's say I've got Landstar and Mercer listed as "additionally insured." I'm hauling a Mercer load and I get into an accident with a Landstar truck. Isn't then my insurance company screwed either way?
C) Yes, I know I should just ask my agent but:
1) I wanted to get your opinions and angles first so I don't sound like a complete idiot when I call her.
2) I've been very busy and haven't had a chance to call during business hours.
D) What are your general views on trip leasing/taking loads with the above (but not limited to the above) companies?
1)I will not be depending on the above for my "meat;" ---My main paying gig; I'll generally use the above for repositioning purposes.
2)Do you have any other recomendations as far as other companies who broker out loads or trip lease?
[This message was edited by Sir Lee Teemster on January 09, 2003 at 22:50.]
Answer
Sir Lee Teemster, you post has been copied to the Insurance forum. Please be sure to check there also for additional responses.
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Answer
KEY ISSUE....INSURANCE!
Answer
KEY ISSUE....INSURANCE!
When you sign a typical trip-lease, you will find wording similar to "hold harmless and agree to indemnify". That is the key.
When you enter into a trip-lease, you are agreeing to hold the "broker/motor carrier" harmless for anything that happens and you agree to reimburse them for damages, legal fees, court costs, etc.
Do you carry Liability and cargo now? If you do, call your agent and ask your questions. Insurance companies are differenct. It's important to know what your insurance company allows.
I do not recommend pulling a load for one company with the trailer of another. You're asking for trouble UNLESS you have express written permission of the parties involved. Don't guess and don't take anyone's "word" because in the final analysis, the only on that stands to lose is you, because everything rolls downhill.
Answer
Since you have been kind enough to share your knowledge with me, I will return the favor.
I am a lawyer, and have represented truckers and insurance companies quite a bit over the years. What I know, however, is Indiana law. Although there are federal law aspects to trucking liability (federal law is the same in every state), there are state laws and regs that vary from state to state. Whaich state law applies is controlled by where the contract was entered into, where the accident occurs, and where the parties to the contract are located. Such litigation can be quite complicated.
The carrier who accepted the laod is responsible to the shipper under the federal laws governing interstate shipment (if it is an interstate shipment), otherwise by state law. The carrier accepting the load is almost stricltly liable for anything that damages that load.
The carrier whose permits you are using when the accident occurs is liable under federal law, and some state laws, for injuries and property damage. so is the driver pulling the load, and any carrier he is dispatched by. If your own carrier sends you to pick up a Landstar load, the authority of both carriers is involved and both are liable for injury and damage to third persons, as well as to the shipper for damage to cargo. These propositions have nothing to do with who is insured by whom.
Everyone involved in the process of transporting the load will usually have insurance; the language of the policies will spell out whose policy is "primary", meaning, who policy pays the first dollar, and who is "secondary" meaning at what point the second policy starts paying.
You as an 0/0 have the same liabilites as the carriers. Even if you are covered under their policies, if you have no liability policy of your own, you will have some exposure to paying damages to someone, shipper or injured/damaged third party. Furthermore, if the carrier's policy pays out, the carrier has a right of subrogation to sue you, and if you are proven to have been negligent and at fault fot the damages, you will have to reimburse the carrier's insurer. (unless, and only unless) you are insured under the carrier's policy.
So, your first issue should be to make sure that you are covered under any policy that the carriers have.
When somebody tells you to make THEM an additional insured under YOUR policy, it most likely means that you have no coverage under theirs. THEY are covered under their policy for your negligence, but you are not. So, if their insurer pays out, you are subject to getting sued for reimbursement. Thus, you must have liability coverage from somewhere, for cargo damage and for injury/damage you may cause to third persons.
If someone is an additional insured on your policy, your insurer will likely be "primary" on the liability payout. However, your own insurer cannot turn around and sue you for re-imbursement. The worst they can do is cancel you or raise your rates. So, in principle, making someone an additional insure on your policy is a good idea.
There is, obviously, a business issue:If someone wants you to make them an additional insured on your policy, it may cause your premium to go up, because the underwriting risk to your insurer increases when you pull for more than one carrier. Unless you will haul frequently for that additional insured, it may not be economically feasible to insure them for just the occasional load. You need to ask your agent about this.
If somebody is named as an additional insured, you can get a certificate (separate from the policy) showing that, so that you can keep it in the cab.
Don't worry about your insurance carrier getting screwed. Insurance companies charge premiums to accept risk. Worry instead about being screwed yourself, by some carrier's or shipper's insurer trying to screw you.
I hope this helps.