Insurance – Commercial Carriers Insurance Agency

Timely Reporting of Claims

If/when you are involved in a crash or an incident of liability occurs, that incident should be reported to your insurance company as soon as possible.

Following a crash, several important steps must be taken. First, gather witness statements and their contact information. Next, collect the insurance details of all parties involved, including license plate numbers, and photos/videos of the scene. Finally, report the incident to your insurance company, regardless of the damage involved. Failing to do so could jeopardize your claim and leave you vulnerable to unexpected legal action.

Commercial trucking operations often become targets for claims. Personal auto limits in California are $15,000 for injury/death to one person; $30,000 for more than one person; and $5,000 for damage to property. Vehicles with a USDOT or a CA state serial number are subject to a $750,000 minimum, but most carry $1 million. That limit unfortunately has incentivized people to target truckers regardless of actual damage/injury and there’s no shortage of lawyers willing to help them.

Why Timeliness Matters – When you purchase insurance you enter into an agreement to share the cost of any claims with the insurer. That agreement specifies certain conditions that must be met for coverage to apply. Conditions such as reporting claims and lawsuits to the insurance company in a timely manner and your cooperation throughout the claim process are high atop that list. You should read your policy for specifics as contracts differ. However, if your insurer believes that any delay or breach indicates a false claim or has caused them harm, they may deny your claim or drop your coverage.

Risks of Delayed Reporting – Waiting to report a claim can be risky. The other party might initially agree not to pursue the claim but could later change their mind. Example: It’s now a month or more after the incident and the other party has decided to file a claim. They’ve hired an attorney and are threatening a lawsuit. You’re now at a serious disadvantage as any witnesses (if you have any that can be contacted), may not remember details of the incident as clearly. It’s now more difficult to gather evidence such as video from nearby businesses. You may be less successful in defending that any damages or injuries weren’t the direct result of that crash.

Protect Yourself – When you’re involved in a crash or any incident that could lead to liability, protect yourself by documenting as much as you can with evidence and witnesses. It’s crucial to report it to your insurance company as soon as possible to protect your rights, strengthen your defense and ensure that you remain covered under your policy. Be sure to review your insurance policy to understand your obligations. When in doubt, reach out to your agent for guidance.

Fraud/Theft in the supply chain

Cargo Theft/Identity Theft/Pilfering/Forgery

As the holiday shipping season progresses, the issue of fraud/theft demands urgent attention from every link in the supply chain. The peak shipping period typically sees increased security risks, making it essential for all stakeholders to remain attentive. Cargo theft is the most prevalent form of fraud within the trucking industry and has seen a dramatic increase, with sophisticated schemes such as strategic cargo theft becoming more common.

Recent statistics reveal a staggering 600% increase in cargo theft between November 2022 and March 2023, with experts predicting no signs of a slowdown. The Transportation Intermediaries Association and CargoNet report that California, Texas, and Illinois account for 73% and 57% of all cargo thefts in Q1 and Q2 of 2024, respectively.

Criminals increasingly rely on sophisticated methods to acquire sensitive shipment data that allow thieves to track and stalk those loads. This information can even be obtained from one’s own employees. Recognizing this and the risks associated with not securing shipment details is vital for companies.

Thieves are employing sophisticated methods, such as email spoofing and phishing to acquire sensitive shipment details and personal data (identity theft) that allows them to exploit a company or individual. Once they have those details, you and your security protocols are the last layer of defense.

Three Key Preventive Strategies

Confidentiality: Educate your team about the sensitivity of shipment details and the importance of not divulging those details outside of trusted circles.

Route Variation: Regularly alter routes to disrupt any patterns that thieves might exploit.

Verification: Conduct due diligence when dealing with unfamiliar vendors. Confirm identities through direct contact with the company.

As the trucking industry becomes more technologically advanced, integrating security technology is vital. Tracking/security devices should be installed on each piece of equipment to help monitor, alert, detour and recover. Example: Utilizing GPS tracking can provide real-time location updates, helping to deter thieves and recover stolen cargo more swiftly.

As criminal tactics become increasingly sophisticated, the need for constant vigilance and updated prevention strategies is paramount. Emerging technologies may soon revolutionize how the industry secures cargo but until then be ever watchful and do your part and protect your equipment and your data.

If you do not already have an anti-fraud/theft training process in place, it is time. Fraud/theft are tied to your reputation, your cost of doing business, your safety rating, your finances and so much more.

Below are some strategies that you can incorporate into your training programs.

- When encountering unfamiliar individuals claiming to be from a vendor, reach out to that vendor and confirm the legitimacy of the that individual before proceeding.
- If/when you receive a promise of an offer that is significantly generous, be skeptical and make the effort to understand the reason behind such offers.
- Refrain from responding to unsolicited emails and clicking on links from unfamiliar sources.
- Monitor and verify carrier legitimacy. Check how long a carrier has been in business, confirm DOT registration, and ensure that phone numbers and email domains are valid.
- Maintain password confidentiality and strength. Regularly update passwords and close accounts or systems that are no longer needed.
- Regularly update training and security protocols to stay ahead of evolving threats.

Despite these extensive precautions, fraudsters adapt and find new ways to exploit vulnerabilities in the supply chain. Adding to the already long list of criminal strategies is a new form of fraud — document forgery which consists of the non-delivery of whole shipments. Assuming the role of a professional driver to fraudulently secure a load, criminals drive the load to its intended destination, partially unload it and then alter the bill of lading to show the complete load was delivered.

Freight fraud in the trucking industry represents an estimated $800 million annually. There is no estimate for how much that costs a carrier or broker’s business.

Latest Claims Trends

It is our intent to regularly inform you of trending claims affecting our insureds. Having examined our most recent claims data, our analysts have detected two trends that need attention.

First, our claims handlers have been receiving claims where other vehicles have been crashing into our insured’s vehicles. Secondly, rear-end crashes persist as a chronic claim.

In situations where another vehicle collides with yours, it is imperative that you document as much about the crash as possible. Due in large part to a trucker’s liability limits being significantly higher than 4-wheel motorists, the industry is under assault by fraudulent individuals/groups and attorneys dedicated towards acquiring and litigating trucker claims regardless of fault.

In documenting the scene, you should be photographing all angles of the crash including the area of impact. Be sure to photograph signs, license plates of vehicles involved, the intersection, and skid marks. Try to do this while maintaining relativity to the crash area. Additionally, seek out names and numbers of any witnesses and be sure to take time to write down your account of the incident.

With respect to rear-end crashes, these crashes are chronic and should continue as a hot topic discussion at driver meetings. Below are some tips to reducing this type of crash.

If you are in a rush, you will likely be driving too fast for conditions or too close to be able to stop in time to avoid a collision. Maintain space between you and the vehicle ahead of you. A 3-second cushion should be minimum at higher speeds. Maintaining this cushion is very important due to motorists merging unexpectedly and braking quickly.

Distractions can take your attention from the road. A loaded semi traveling at 60 mph will travel 88 feet per second and need roughly 500ft to fully stop. At that same speed a 4-wheel motorist can stop in around 200ft. Minimize your distractions and keep focused on the road.

Hit & Run – was it you

We have coached you before that when you are involved in a crash, safely pull over to evaluate and secure the scene, exchange information and take photographs. But what if you didn’t know you were involved in a crash.
Driving an 80,000 lb tractor trailer combination on today’s busy roads is a challenging task. So much so, it requires a licensed professional to do so – even then accidents happen. So what should you do if after a couple miles you are pulled over and told you were involved in a crash that you have no knowledge of. Not only involved, but now are being accused of leaving the scene of an accident.
Believe it or not it’s not so uncommon of an occurrence where a truck clips something like a tree, fence or even a vehicle without knowing – especially when turning. For me, having an office on the 3rd floor near a freeway where big trucks frequent is an awakening experience. You regularly feel the rumble of the truck’s mass and weight coming down the street followed by the jarring sounds of the trailers lifting and falling back onto their couplers.
Being inside the cab with that going on can certainly mask an event as mentioned above. Being accused of leaving the scene of an accident is very serious. Being convicted of that is far worse. Hit and Run involving property damage or injury/death can be charged as a misdemeanor or felony depending on the seriousness of the circumstances involved. A conviction of a hit and run is an automatic one year disqualification of your commercial operating license for the first offence and disqualification for life for a second offence.
If you receive a ticket for leaving the scene, you’re going to need counsel and you will likely appear before a judge. The ticket is the driver license side of things, but there is also a criminal side that deals with intent.
The general standard for intent is, did you or did you not know that you hit something and left the scene and/or should you have known that you hit something being a professional driver with your experience, your particular vehicle and load.
Evidence helps. Just because you are accused of being involved in a crash, doesn’t mean you were. Inspect your truck for any markings/damage consistent with what is being alleged and always take pictures. In one case, our insured was able to provide his load ticket and GPS tracking for the day in question which proved he wasn’t in the area at the time of the crash. So taking note of the time can be very important.
The bottom line is that any time you notice something abnormal, you should make an effort to check it out. It may be nothing or there could be an issue with your vehicle that could create a bad situation or worse. The point is not to dismiss a potential warning sign. Like the Boy Scout motto reads “Be Prepared” and their slogan that reads “Do a good turn daily”. For you drivers, those daily turns are very important.

New CCIA Gear!

Have you received your new CCIA t-shirt yet?

The CCIA team came up with a new design this year that highlights the theme of the nation’s supply chain. The title of the shirt is “Strongest Link In The Supply Chain”. The tri-tone design shows a class 8 tractor emerging from the center of a black shirt surrounded by chains. The tractor is adorned with wings symbolizing the free movement of goods that are carried throughout the nation. We hope you enjoy it!

Every year, the CCIA team produces a different shirt design and distributes them to its clients. These are typically sent in XL, contact your agent for a different size. We’d love to know what you think about the shirts and are open to ideas for next year’s design.

Vehicle Prices Creating Big Insurance Gap

If you’re looking to buy a new truck right now, you’re likely aware that there’s a supply and demand problem. The supply problem is with parts and how long the problem will last is unknown. So, if you really need that new truck right now, you may be in a tough spot and forced to pay more for it – a lot more. While a used truck will cost you less, relatively speaking, current used truck prices are shockingly high as well.
Because of the ongoing delays with new vehicles, used vehicles have been in high demand leaving fewer of them available. And the ones that are available are being sold at premium prices.
That brings me to our first concern. With regards to your Physical Damage insurance coverage, it’s likely that you are covered for an amount that was determined by “you” before the recent supply issue. This would likely have been a conversation with your agent asking you “how much could you purchase your truck for right now?”. If your vehicle is totaled in a loss, you will be indemnified based on the lesser of the amount you previously valued it at, or the actual cash value using comparables on the market. Because of the current spike in prices, you could be left paying a sizable amount out-of-pocket to find a replacement vehicle. Example: XYZ Trucking had a complete loss to their tractor that they valued at $20,000. Due to the recent supply and demand issue, the market value of that used tractor is now $30,000. XYZ Trucking will be indemnified up to the $20,000 valuation. Now, XYZ Trucking will have to pay an additional $10,000 out-of-pocket to purchase another tractor of like kind.
Our second concern is the problem with the parts supply. Due to the lack of availability with certain parts, repairs to your vehicle could take an indefinite amount of time. Because of this, your vehicle could potentially be deemed a total loss. This would once again put you in the above-mentioned situation of needing a significant amount of money out-of-pocket to find an acceptable replacement vehicle.
It may be time to revisit that valuation and upgrade your protection. Simply call your agent to discuss this important topic.

Comprehensive Safety Program

The existence of your operation doesn’t just depend on profitability

So, your insurance company is pressing you about the details and contacts of your safety program. Do you roll your eyes and think, “Safety Program!!!”, “How can I make this go away so I can just drive and earn a living”, or do you have a meaningful plan in place? A comprehensive safety program is a must for mitigating losses and goes a long way towards portraying you as a responsible carrier that over time reduces the operational risk and protects employees.

From the ever-increasing cost of equipment to sophisticated insurance fraud rings and nuclear jury awards, insurance companies are finding it harder than ever to reduce the financial volatility of a claim. Because of this, it is imperative that you as a motor carrier have controls in place for closely managing the safety of your operation.

Insurance companies are in the business of transferring risk from you to them. How much risk they take is the variable, but it is not a guessing game. Every insurance company has a set of standards that create their preferred risk. Any deviation from that criteria makes you a less common risk and often a less desirable risk which could mean higher premiums, declination or cancellation/non-renewal of your policy(ies). Each at-fault claim that a motor carrier incurs raises the percentage of money paid in premiums compared to money the insurance company pays to settle those claims. Once the insurance company pays out an amount on the carrier’s behalf that exceeds their level of tolerance for that risk, they become less desirable and will surely incur repercussions.

An alarming trend over the past number of years has been the way law firms have used the advertising of large awards to solicit new clients. Especially how those firms portray the trucking industry as reckless and irresponsible. The insurance industry is all too familiar with the trend and is continuously looking for ways to slow the onslaught. The result of those awards materialise as raised premiums, cancelled/non-renewed policies, risk reduction and tighter risk selection by ensuring the client is as risk-free as possible and has a safety program in place.

A recent study by the Transportation Research Institute (ATRI) attempts to make sense of out-of-control jury awards against the trucking industry. Interviewees from the ATRI study generally concurred that the more safety activities motor carriers engaged in to prevent crashes the lower the likelihood that a nuclear verdict would result. It was also commonly noted that motor carriers typically do not allocate enough resources toward safety and crash prevention.

There are many factors that play a role in determining fault and awarding large payouts – many of which are out of the control of trucking companies. Nevertheless, motor carriers need to focus on those areas that they can control such as: meeting/exceeding FMCSRs, equipment maintenance, inspections, citations/violations, cargo securement, driver training, and properly maintaining log books.

Plaintiff attorneys will frame FMCSRs as minimum standards and juries are less forgiving when plaintiffs can document that additional reasonable steps to prevent a crash could have been taken, regardless of compliance with FMCSRs. The ability of defense attorneys to have documented safety activities that exceed FMCSRs carries great weight with juries. This also makes you a better risk in the eyes of an insurance company. According to the ATRI, a key strategy among plaintiff attorneys is to emotionally charge a jury against a motor carrier by painting them as careless and unsafe. However, a motor carrier that has not only met FMCSRs but exceeded them, reduces the ability of the plaintiff attorney to stigmatize them. This is where a safety program can validate responsible safety efforts.

A reasonable and responsible safety program should have appropriate, documented disciplinary actions. Per the ATRI study, in situations where there was any history of alcohol or drug use by the truck driver, it became much easier to convince a jury that the truck driver was at fault for the crash – even when the crash causal factors were unclear or tenuous. So, a responsible action might be to have documentation
that meets or exceeds what is expected before hiring or returning a driver to active duty following a positive test – regardless of time between the test and return to duty.

To begin drafting a safety program, begin by answering some questions you might be asked following a crash such as:

What steps have you taken to ensure your drivers are roadworthy?

What operational, safety or training factors could have prevented the crash from happening?

What actions have you taken following previous crashes?

Do you have training sessions/driver meetings?

Do you have a vehicle maintenance schedule?

Are your pre- and post-trip inspection reports handled properly?

Do you audit logbooks?

Are your inspections clean or are there patterns in violations?

Plaintiff attorneys are not paid by the hour but by the size of the award. Following a crash, you should expect that every aspect of your operation from maintenance to meal breaks will be scrutinized for the sole purpose of applying fault. Be proactive and have a comprehensive safety program in place. If you need help, contact your insurance agent or a loss prevention specialist.