Renting out long-haul trucks, whether to carrier companies who need extra rigs to handle peak demand periods or to startup businesses lacking the capital to buy a rig, can be lucrative. But it does carry significant liability risks. Accidents involving your client’s rentals can damage property and cause injuries or fatalities to truck drivers, motorists, and pedestrians. Litigation following these accidents may target the rental company and may find it partially or wholly at fault.
Here are three accident scenarios for which your rental client may be held liable:
Risk #1: Tire Blowout
Chronic underinflation will damage the rubber and sidewall belting in tires. This damage doesn’t go away even after the affected tires are re-inflated to their proper pressure. A renter could abuse the rig’s tires in this way and then re-inflate them before returning the truck to the rental company. The company might then rent the truck to another customer without knowledge of the tire damage. The customer may then use the truck on a hot day (which stresses the damaged tires) and experience a blowout that damages the truck, cargo, and involves several motorists.
Risk #2: Wheel-Off Accident
Improperly installed wheels may come off while the rig is on the road. Excessive torque on the lug nuts can overstress and weaken the studs, which can break and cause a wheel to come off the trailer. Under-torqued nuts can come loose and cause a wheel-off accident. This mistake can be made by a renter or by the rental company. Runaway wheels have crashed into the windshields of moving cars, struck pedestrians, and crashed into the windows of nearby buildings.
Risk #3: Underride Accident
Poor maintenance of the rear underride guard of trailers has caused underride accidents. However, this accident can also occur when a car strikes the unprotected side of the trailer. This can happen when missing or burnt-out trailer lights, or missing reflective strips make the trailer invisible at night. Empty flat-bed trailers are very difficult to see at night from the side, and the lack of lightning and reflective tapes will exacerbate the problem.
This night invisibility has caused cars to strike the trailer’s side without every braking before impact. Such accidents are catastrophic to the occupants of the car. Failing to wash mud off the lights and reflectors of a trailer can also cause the same problem.
Are Your Long-Haul Trucking Clients High Risk?
The increasing need for overland transport combined with the retirement of an aging workforce has created a truck driver shortage. On the face of it, times ought to be good for truck drivers but the reality is different. What remains of the driving workforce must bear the brunt of the increasing demand for trucking services. This means they must transport more loads at ever tighter delivery schedules.
This problem is exacerbated by the rise of e-commerce, which has placed pressure on the trucking industry for faster deliveries at a lower cost. All of this sums up to stressed and overworked truck drivers sharing the road with the driving public, which leads to increased trucking accidents and litigation against the truck drivers and their carrier companies.
An Inexperienced Workforce
Long-haul trucking has never been an easy way of making a living. While there are individuals who are drawn to and even thrive in the profession, many new hires never adjust to the grueling 2,000 or 3,000 miles per week of driving combined with the long periods of time away from their families. Because their employers are operating on thin margins, the pay is low and is often based on coverage mileage.
These factors, combined with demanding delivery schedules, result in a high annual turnover rate. This leads to a perpetual workforce of inexperienced drivers who lack the driving and safety skills that can only be gained by years of road experience. Carriers with a large percentage of new-hire drivers face a high risk of accidents and civil litigation, many of which could be negligent hiring lawsuits.
The above difficulties are common throughout the trucking industry. Do these factors affect your long-haul trucking clients as well? If this is the case, they might have insufficient coverage.
Cargo Theft: A Growing Threat to Your Long-Haul Trucking Clients
Cargo Theft has always been a problem for the long-haul trucking industry. In past decades, it was often a crime of opportunity. A trailer full of goods was left overnight in a dark and remote area with only padlocked trailer doors for security, and a thief would seize the opportunity with little premeditation. Although such opportunistic heists still abound today, an increasing number of cargo theft incidents are sophisticated and well-planned crimes.
Two tactics most commonly used in cargo theft:
1. Increased Use of the Internet
- Load boards are used by truckers to quickly find loads to carry. However, cargo thieves also use them to learn about recent shipments. The internet is also useful for learning about hubs where cargo is picked up or delivered, such as distribution centers and warehouses. The thieves then case these areas for expected shipments, or for targets of opportunity. A trailer with goods parked overnight might get broken into or hitched to a tractor “owned” by the thief.
- Sometimes, thieves will steal an entire rig including the tractor and its loaded trailer. Another tactic involves waiting for a truck to pick up a cargo load, and then following it until it stops in an unsecured area where its cargo is taken.
2. Carrier Identity Theft
- A small but increasing percentage of cargo heists involves thieves learning about an arrangement between a shipper and a truck carrier. The thieves then arrive at the shipper’s dock posing as the carrier with forged papers before the legitimate truck arrives. Sometimes they carry this out with insider help from the shipping company. A variation to this scheme involves setting up phony trucking companies complete with fake websites, which fool legitimate companies into using their “services”.
Cargo theft isn’t limited to high-value items such as pharmaceuticals, computers, and electronics. Sometimes food and drink shipments are targeted because of their relaxed security and the greater ease of fencing them off. An added benefit is these goods are consumable, which makes their long-term tracking by law enforcement more difficult. As should be clear, cargo theft is an ongoing risk that won’t go away anytime soon. Does the motor truck cargo insurance of your long-haul trucking clients adequately cover the loads they carry? If not, or if you aren’t sure, contact us to learn about Prime Insurance Company’s excess liability coverage.
Protect Your Long-Haul Trucking Clients from Cargo Damage and Theft Liability
Enclosed trailers can carry a lot of cargo, the value of which can be hundreds of thousands of dollars. Low bed trailers may carry earth-moving equipment that have the same worth as a medium-sized house. Cargo damage or theft can be a huge financial setback for the underinsured long-haul trucking business and can wipe out the small operation of an owner-operator. These risks are explained next.
- Accidents. A moderate or high-speed trucking accident can jackknife or overturn a tractor-trailer, spilling its valuable cargo onto the road. Accidents happen for any number of reasons. Often it’s the fault of a motorist with poor driving skills or habits. However, only the truck driver can be found at fault for accidents caused by bad weather or poor visibility. The same is true of tire or brake failure, or poor driving focus induced by fatigue, distraction, or poor health.
- Shifting cargo. Cargo that isn’t properly loaded and secured can become unstable and fall over inside the trailer. This by itself may damage cargo, or if it causes a significant weight shift, may cause the driver to lose control. Cargo leaning against the inside of the trailer doors can fall out when they’re opened. Improper cargo placement may make the trailer top-heavy and cause the semi-truck to tip over while cornering.
Many criminals consider long-haul trucking cargo as “soft targets.” The trailers holding the cargo often lack the sophisticated security systems common to stores, yet contain a large volume of high-value goods. For example, designer clothing, auto parts, and medical supplies are especially high value. Too often, the only security between a thief and these goods is a trailer door paddle lock. More sophisticated security devices are available, but cargo thieves are also getting smarter and are using more sophisticated entry methods. Your long-haul trucking clients should have enough motor truck cargo liability insurance to safeguard their businesses in the event their cargo is damaged, stolen, or otherwise declared a loss while under their care.
Long-Haul Trucking and Underride Guard Maintenance
Are Your Long-Haul Trucking Clients Doing the Bare Minimum on Maintaining Their Underride Guards?
Trucking and hauling insurance are becoming riskier and riskier. Many insurance carriers are refusing to insure towing clients altogether and that trend is starting to transition more and more into the trucking sector. The costliest risks are related to safety, especially if you are providing liability coverage, and knowing more about the regulations and safety concerns related to semi-trucks gives you better context for evaluating potential clients.
What safety feature is receiving the most attention nationwide?
More and more representatives, including Senator Chuck Schumer, are looking into increased regulation for underride guards. Underride guards are the metal structures added to the bottom rear of trailers to prevent passenger vehicles from sliding under the body of the trailer in the event of a collision. The bars force the front and hood of the passenger vehicle to absorb most of the impact, and to launch the airbag features, so the body of the car and the passengers themselves are more protected. The addition and maintenance of rear underride guards have been federally regulated for years. However, researchers and politicians are focusing on two central changes: (1) the additional requirement for side underride guards to protect passenger vehicles in the event of a side collision or T-bone accident, and (2) increased regulation regarding the maintenance of rearguards. Currently, side guards are not required and regulations allow for guards without reflective tape and even guards that are rusted through. Even if trucking clients are following the federal minimums, consider the quality of the guards when making risk evaluations. The guards do not fully prevent injuries or fatalities in many accidents, and the resulting legal procedures, medical payouts, and claims can quickly exceed insurance limits.
How the Federal Mandate for Electronic Logging Can Impact Your Trucking Clients
One of the best ways to make sure you can adequately cover your long-haul trucking clients is to keep track of recent changes in safety regulations. While many changes in regulations are facing delays or challenges in implementation, one mandate that many independent trucking companies will struggle with the is the federal mandate for electronic logging devices. The federal mandate requires all truckers to have a device that monitors daily hours of driving and operations to ensure that all drivers stay within federal and state maximums for driving hours.
The deadline for implementing this shift from paper-based logging to electronic devices that automate the information is December 18, and, while many large carriers have already completed the switch through internal policy changes, many small businesses and independent owner-operators have hesitated due to the cost and uncertain regulatory changes. The cost per device is over $700 on average, which may not be in the budget for many of your clients. Additional confusion is caused by the lack of inspection criteria and investigatory procedures; the Federal Motor Carrier Safety Administration has not yet given the Commercial Vehicle Safety Alliance clear instructions on how to conduct inspections with the mandate in mind.
Even though this new rule can increase safety by more strictly enforcing the maximum daily drive time, in the short-term it will lead to increased liability, fines and equipment charges, and potentially even temporary shutdowns if truckers lose licensure or face penalties. If you’re currently working with prospective trucking clients or reviewing policies for returning business, consider the new uncertainty of this federal mandate in your valuations.
If you have clients that would benefit from excess liability insurance due to equipment difficulties or potential business pauses, Prime Insurance Company can work with you to find the right additional insurance coverage for your clients.
How Long-Haul Truckers Should Protect Their Assets
The freight distribution industry has been facing a lot of changes recently, and a great deal of that focus has been on liability: as more and more companies focus on specific niche portions of national supply chains, the question of where one company’s liabilities end and another’s beginning is still being answered. But your client’s direct risks are just as important, and many need excess coverage to protect their assets.
What excess coverage can help protect your client’s equipment and assets?
- Do they have adequate auto physical damage coverage? Because their trucks cover a lot of distance, they’re susceptible to a lot of damage. This coverage helps protect their fleet in the event of collisions, general damage, and even lost or broken features on their trucks and trailers. If your client is currently trying to grow their fleet, their current coverage might not be enough.
- Are your clients protected against theft? Many trucking companies protect against the theft of their cargo because stolen freight without the coverage to pay back their client is bad for business. But they might not have similar coverage for their vehicles and equipment. If your clients don’t have additional coverage that protects their assets in the event of fire or theft, then they could face losses that take years to recover from.
While liability insurance is non-negotiable for many fleets, your clients might not have the right coverage for their own assets and property, especially if they’re growing faster than their current policy can cover.
Contact Prime Insurance Today for Long Haul Trucking Coverage
The above are just 3 of many accident scenarios for which your long-haul trucking rental clients can be found liable. The more people they rent their trucks out to, the greater their liability exposure. Make sure they have sufficient insurance coverage. To learn about Prime Insurance Company and its long-haul trucking coverage, don’t hesitate to contact us.
Last updated 15 October 2021