Monday, April 30, 2012
More Brokerage in Trucking
The Central Analysis Bureau obtained a report from Transport Capital Partners that the use of brokers by truckers as a way to solicit freight is on the increase.
Approximately 33% of motor carriers used freight brokers in February, up from 11% at the same time last year.
What is really interesting is that 34% of large carriers with at least $25 million in annual revenue used brokers compared to 28% of smaller carriers.
It used to be construed that truckers who used truck brokers were getting paid less, and more involved in irregular route business- thus creating a worse insurance risk. That now is simply not the case.
Truck Brokers are here to stay.....
Monday, April 2, 2012
The Latest Big Claim Against a Truck Broker Involving Double Brokered Loads- $5.1 Million Paid
Showing you the extended tail of transportation claims, a jury awarded $5.1 million against Heyl Logistics on a 1998 claim- a transportation broker and the driver Daniel Clarey. There are a number of things that make this case auspicious and several takeaways.
1) Double Brokered- Heyl brokered the load to Washington Trucking who brokered it to Daniel Clarey- who unbelievably lacked insurance and operating authority. Then to make things even more less than perfect, Clarey was cited with reckless driving and a DUI.
Takeaway- Look for underwriters of truck broker insurance to require contract language in the broker carrier contract that affirms that they do not allow the carrier to double or rebroker a load. Also look for them to decline immediately any risk that does so.
2) Punitive Damages- The court was sending a clear message of no tolerance and as such assigned $1.68 million directly against Heyl. ( The good news for Heyl is that they later settled for less)
Takeaway- Look for more caution when buying surplus lines casualty coverages that exclude punitive damages- as it is clear than borkers have the exposure.
3) Coverage Tail- We have seen a Lloyds policy and other policies that only allow a claim to be turned in within 24 months of the date of loss. Coverage would have been precluded.
Takeaway- watch for carriers that have a claims-made feature.
Look for the marketplace to get more cautious....
1) Double Brokered- Heyl brokered the load to Washington Trucking who brokered it to Daniel Clarey- who unbelievably lacked insurance and operating authority. Then to make things even more less than perfect, Clarey was cited with reckless driving and a DUI.
Takeaway- Look for underwriters of truck broker insurance to require contract language in the broker carrier contract that affirms that they do not allow the carrier to double or rebroker a load. Also look for them to decline immediately any risk that does so.
2) Punitive Damages- The court was sending a clear message of no tolerance and as such assigned $1.68 million directly against Heyl. ( The good news for Heyl is that they later settled for less)
Takeaway- Look for more caution when buying surplus lines casualty coverages that exclude punitive damages- as it is clear than borkers have the exposure.
3) Coverage Tail- We have seen a Lloyds policy and other policies that only allow a claim to be turned in within 24 months of the date of loss. Coverage would have been precluded.
Takeaway- watch for carriers that have a claims-made feature.
Look for the marketplace to get more cautious....
Subscribe to:
Posts (Atom)