Bobtail Myths, Fact or Fiction

Transcription

1 Bobtail Myths, Fact or Fiction December 21, 2016 Presented By Ben Droessler, Vice President Independent Contractor Risk

2 WEBINAR TOPIC Owner operator liability policy myths that could cost you (motor carrier) money Non-Trucking Liability and Bobtail insurance are the same Non-Trucking Liability insurance never pays claims No options are available for better Non-Trucking Liability policies Type of Non-Trucking Liability policy doesn t matter to me (motor carrier) 2

3 NON-TRUCKING LIABILITY AND BOBTAIL INSURANCE ARE THE SAME FICTION! Bobtail Liability - Covers truck anytime detached from trailer - Bobtailing Non-Trucking Liability - Covers truck when NOT used in the business of anyone to whom the truck is leased - Notice no reference to being detached from trailer - 95% of policies today are Non-Trucking Liability not true Bobtail 3

4 NON-TRUCKING LIABILITY INSURANCE NEVER PAYS CLAIMS FICTION! Non-Trucking Liability policies do pay claims NTL policies > 386 claims > $957,317 paid - Grocery store example - Personal use of truck What determines if policy pays? - Policy language: in the business of very vague - Jurisdictional case law: courts left to determine if truck was operating to further the motor carrier s business at the time of incident o To/From garaging location to terminal o Maintenance 4

5 NO OPTIONS ARE AVAILABLE FOR BETTER NON-TRUCKING LIABILITY POLICIES FICTION! Broader Non-Trucking Liability policies exist! - Base policy language differs between insurers - Broadening coverage endorsements available - Claim handling interpretation differs between insurers 5

6 NO OPTIONS ARE AVAILABLE FOR BETTER NON-TRUCKING LIABILITY POLICIES Base policy language differs between insurers - ISO CA 23 09: This insurance does not apply to: a) a covered auto while used to carry property in any business, b) a covered auto while used in the business of anyone to whom the auto is rented or leased. Who is An Insured does not include anyone engaged in the business of transporting property by auto for hire who is liable for your conduct. - Hudson: No coverage is afforded when the covered auto is: 1) Under motor carrier direction, control, or dispatch; 2) Used to carry property in any business or en route for such purpose; 3) Used in the business of anyone to whom the auto is rented; 4) Operated, maintained or used in any professional or organized racing, speed or demolition contents, pulling event or stunting activity; 5) Leased without an operator; 6) Operated, maintained or used in any Public Livery or Conveyance operations; or 7) No coverage is afforded if a valid, long term lease agreement does not exist between the Named Insured and a motor carrier. Long term lease agreement means a written lease agreement of not less than 30 consecutive days duration between the equipment owner (lessor) and a designated motor carrier (lessee) and shall not mean a trip lease (single trip or duration of less than 30 days). Vehicles in the Custody of a Lessee are not covered when written lease agreement requires the lessee to provide insurance. WHO IS AN INSURED does not include (i) anyone engaged in the business of transporting property by covered auto for hire who is liable for your conduct; (ii) a motor carrier; or (iii) any of your household members. 6

7 NO OPTIONS ARE AVAILABLE FOR BETTER NON-TRUCKING LIABILITY POLICIES Broadening coverage endorsements available - To/From: [NTL] exclusion does not apply to a covered auto while it is traveling from 1) the location where the covered auto is regularly garaged to any terminal or facility of anyone to whom the covered auto is leased, rented or loaned for the purpose of picking up a trailer, or 2) any terminal or facility of anyone to whom the covered auto is leased, rented or loaned where the insured has delivered a trailer to the location where the covered auto is regularly garaged. - Maintenance: [NTL] exclusion does not apply to a covered auto while it is traveling from: 1) The location where the covered auto is regularly garaged to any maintenance facility for the purpose of having regular maintenance performed, or 2) Any maintenance facility where the covered auto has been for the purpose of having regular maintenance performed to the location where the covered auto is regularly garaged. Regular maintenance means the routine or regular work required to keep a covered auto in such condition that it may be used for its intended purpose. 7

8 NO OPTIONS ARE AVAILABLE FOR BETTER NON-TRUCKING LIABILITY POLICIES Broadening coverage endorsements available continued - Broad form Bobtail: The insurance afforded by this policy does not apply: A) to any person or organization or any agent or employee thereof, other than you, engaged in the business of transporting property by auto for others; or B) while the covered auto is being used to carry property in any business; C) while a trailer, semi-trailer, chase vehicle, dolly, or another truck or tractor unit is attached to or in the process of being attached to or detached from any covered auto. - Unladen: [NTL] exclusion does not apply to a covered auto that: 1) Does not contain or is not carrying property of others; or 2) Is attached to a trailer that does not contain or is not carrying property of others. 8

9 NO OPTIONS ARE AVAILABLE FOR BETTER NON-TRUCKING LIABILITY POLICIES Coverage & Monthly Pricing NTL NTL + To/From & Maintenance Bobtail Unladen Least Coverage $25-$35 Better Coverage $35-$45 Clearest Coverage $45-$55 Best Coverage $85-$150 9

10 NO OPTIONS ARE AVAILABLE FOR BETTER NON-TRUCKING LIABILITY POLICIES Claim handling interpretation differs between insurers - deny & fight - pay & go away - Ask for example claims paid and denied 10

11 TYPE OF NON-TRUCKING LIABILITY POLICY DOESN T MATTER TO ME FICTION! Non-Trucking Liability claim denials force motor carrier auto liability policies to pay Result: motor carriers with weak Non-Trucking Liability policies pay higher insurance costs (deductibles & premiums) 11

12 TYPE OF NON-TRUCKING LIABILITY POLICY DOESN T MATTER TO ME CASE STUDY: 279 unit Owner Operator fleet with settlement deduction Non-Trucking Liability program including To/From Endorsement $400,000 $350,000 $300, NTL Losses $353,250 in NTL claims paid, saving Motor Carrier estimated $706,500 in Auto Liability premiums* $250,000 $200,000 $150, $100,000 $50,000 $0 *Assumes Auto Liability insurer targeting 50% loss ratio 12

13 WEBINAR TOPIC Owner operator liability policy myths that could cost you (motor carrier) money Non-Trucking Liability and Bobtail insurance are the same FICTION! Non-Trucking Liability insurance never pays claims FICTION! No options are available for better Non-Trucking Liability policies FICTION! Type of Non-Trucking Liability policy doesn t matter to me (motor carrier) FICTION! Do your Owner Operators have the right Non-Trucking Liability policy? 13

14 QUESTIONS? BEN DROESSLER Vice President

15 QUESTIONS?