Risky Business
How ISO changed Expediting Insurance
Hi Everyone, Last week I talked about the history of Trucking and FMCSA's regulations, but how has insurance for truckers changed?
Insurance is a highly regulated industry. All insurance is written under a specific contract or "form", designed by the Insurance Services Office, or ISO. Insurance carriers then adopt one "form" or another to use as the basis for the policies they offer to all of us. This is the same in both personal auto and home, as well as commercial policies.
In the past, Truck Insurance was offered under one contract, called the "Trucker Form". In 2010, ISO eliminated this contract, and replaced it with two other options which are very similar, the "Motor Carrier Form" and the "Business Auto Form".
A major difference between the old Trucker Form and the two new Forms is how a Liability claim (you've hit someone or something and you're being sued) will be paid.
On the old form, the Motor Carrier was automatically responsible for the Liability claim of his Owner Operator.
On the new forms this no longer necessarily applies. When a claim occurs, the insurance is triggered by the agreement between the Motor Carrier and the Owner Operator.
If a Motor Carrier has an agreement with his leased on Owner Operator that the OWNER OPERATOR is Primary on the insurance, then the Motor Carrier becomes EXCESS.
If a Motor Carrier has an agreement with his leased on Owner Operator that the MOTOR CARRIER is Primary, then the Owner Operator becomes EXCESS.
This concept has caused an explosion of new agreements between Motor Carriers and Owner Operators. There are good arguements for both options.
We've essentially moved from looking at whose name is on the bill of lading or side of the truck to the written agreement between the Motor Carrier and Owner Operator.
...Next week, more on how that affects the MCS90 and 91X required by FMCSA.
Shelly Benisch, CIC Commercial Insurance Solutions (CIS)