Happy New Year!\u00a0 For most of you, these past few years have been a struggle.\u00a0 The mere fact that you are still in business is a testament to your business sense and survival ability.\u00a0 However, many challenges still face all of us, and we can only go on the assumption that this will be the turn-around year for us, our industry, and, hopefully, the entire national economy.<\/p>\n
In my October and December (2010) articles, I spent time reviewing the anatomy of a claim as it may affect you.\u00a0 As an owner-operator, the dangers (in regards to insurance claims) that you are the most susceptible to revolve around three things \u2013 third party liability, physical damage (to your vehicles) and\/or cargo losses.\u00a0 If you haven\u2019t read those two previous articles, please take the time; it may make your life a little easier to understand the process if or when you have a claim.\u00a0 As I have said in my articles many times before, when you are buying your insurance, price is not always the most important
\nconsideration \u2013 coverage is.\u00a0 Take the time to understand the exact terms of your insurance policy and the limits and conditions that the insurance company is agreeing (or not) to cover.<\/p>\n
Over the last few months, I have seen more demands placed on owner-operators, by both shippers and brokers, for increased limits of existing coverage or for additional insurance requirements.\u00a0 These all come at a price.\u00a0 If you are put into that situation, you will have to weigh the additional cost against any added revenue that you will hopefully receive by providing these higher limits.\u00a0 Many of these demands for more coverage involve Excess Liability, Cargo and General Liability coverage.\u00a0 Let\u2019s look at each of these types of coverage in detail.<\/p>\n
For an owner-operator, the minimum liability limit is $750,000 for both the state and the Feds.\u00a0 Most of you carry $1,000,000 in liability limits, which is usually a requirement by the shipper or broker.\u00a0 But, more recently, I have had several requests for limits up to $2,000,000 for liability.\u00a0 These limits are now being required by some shippers.\u00a0 Most of the insurance companies that you have your coverage through will not increase coverage beyond one million dollars.\u00a0 What that does is put you into a situation of having to add an \u201cexcess policy\u201d over your existing or primary policy.\u00a0 That policy has to be shopped for by your agent with the companies that write this type of coverage.<\/p>\n
Premiums for an owner-operator for excess liability coverage usually range from $1,000 to $2,000 per year.\u00a0 Many companies have minimum premiums \u2013 the last one that I wrote was $2,300 (annually).\u00a0 There are companies that will write primary liability up to $2,000,000 and your agent should have access to them.\u00a0 You may have to consider the cost in adding excess coverage to your existing policy or rewriting the coverage with a new company.\u00a0 In this process, not all companies will write all risks, so you are limited to those companies that offer the protection your particular operation requires.<\/p>\n
In regards to cargo coverage, the majority of you carry $100,000 in cargo limits, but it is not very uncommon today for shippers and brokers to require $200,000 or $250,000 in cargo limits.\u00a0 These limits are relatively easy to get through your existing carrier.\u00a0 Limits over those amounts are usually harder to place for the average owner-operator.\u00a0 Like increasing your liability limits, an \u201cexcess\u201d policy may be the only option, but it depends on the circumstances.<\/p>\n
Your agent is the conduit to the companies that may write these higher-limit policies, and it may take some leg-work to put together limits in the range of $500,000.\u00a0 Your last option might be a Lloyds Market, but there is a lot of stigma regarding coverage through Lloyds by shippers.\u00a0 If this is the only option you have, take the time and discuss this with the shipper or broker before you commit to the purchase of coverage through Lloyds.\u00a0 It may be a waste of your time if your shipper will not accept it.<\/p>\n
I am also seeing more requests at my office for the addition of General Liability coverage.\u00a0 In a nutshell, this added coverage provides protection to the insured, to include any additional insureds, in the event of a non-trucking claim.\u00a0 Now, you ask, \u201cWhy, if it does not cover the operations of the truck, do I have to carry this type of insurance?\u201d\u00a0 Many shippers have risk managers and\/or attorneys whose main job is to merely cover all their bases in the event of a claim.\u00a0 Usually they have created insurance requirements that lump everyone into a single group that provides goods or services for that company.\u00a0 Many insurance companies have the ability to include the coverage on your existing policy.\u00a0 These costs usually range from $250 to $1,000 annually.\u00a0 If your insurance policy will not accommodate this coverage, a stand-alone policy will range from $750 to $1,500 for an owner-operator.<\/p>\n
General Liability is a business owner\u2019s coverage.\u00a0 It covers you or your employee\u2019s actions away from the truck, such as an altercation on the dock or the responsibility of running a forklift or any other type of non-licensed equipment.\u00a0 General Liability also covers the yard or shop that you park or work out of.\u00a0 General Liability coverage is similar to your homeowner\u2019s insurance policy, which provides coverage in the event of someone getting hurt on your property.\u00a0 It also covers personal injury such as slander or property damage caused by you, other than from your truck, as well as advertising and contractual liability (or even medical) for someone other than yourself.\u00a0 This type of coverage can be broad and extensive.\u00a0 As an owner-operator, this coverage may never be needed, but it still may be required.<\/p>\n
For most of us, 2010 was not a great year.\u00a0 I sincerely hope, for all of us, that 2011 will be much better.\u00a0 And if early indicators are a good sign, I am hopeful.\u00a0 So, work hard and be safe \u2013 the best is yet to come!\u00a0 If you have any comments or questions, I can be contacted through California Plus Insurance Service at 1-800-699-7101.<\/p>\n","protected":false},"excerpt":{"rendered":"
Happy New Year!\u00a0 For most of you, these past few years have been a struggle.\u00a0 The mere fact that you are still in business is a testament to your business sense and survival ability.\u00a0 However, many challenges still face all of us, and we can only go on the assumption that this will be the<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"ngg_post_thumbnail":0,"footnotes":""},"categories":[12],"tags":[],"class_list":{"0":"post-219","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-insurance-review"},"_links":{"self":[{"href":"https:\/\/www.tenfourmagazine.com\/content\/wp-json\/wp\/v2\/posts\/219","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.tenfourmagazine.com\/content\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tenfourmagazine.com\/content\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tenfourmagazine.com\/content\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tenfourmagazine.com\/content\/wp-json\/wp\/v2\/comments?post=219"}],"version-history":[{"count":4,"href":"https:\/\/www.tenfourmagazine.com\/content\/wp-json\/wp\/v2\/posts\/219\/revisions"}],"predecessor-version":[{"id":500,"href":"https:\/\/www.tenfourmagazine.com\/content\/wp-json\/wp\/v2\/posts\/219\/revisions\/500"}],"wp:attachment":[{"href":"https:\/\/www.tenfourmagazine.com\/content\/wp-json\/wp\/v2\/media?parent=219"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tenfourmagazine.com\/content\/wp-json\/wp\/v2\/categories?post=219"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tenfourmagazine.com\/content\/wp-json\/wp\/v2\/tags?post=219"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}