Risky Business

Square Peg in a Round Hole

Hi Everyone,

Insurance is trust in contract form.   Why am I harping on this?   Fraud, and its continued presence in our Expediting Community that is causing Claims Issues that are unnecessary.

All Insurance Companies have “appetites”.   These are the types of risk that they have researched, understand and want to insure.  

When a risk is submitted to any Insurance Company, they trust that what they are being told is true, and determine if the risk meets their “appetite.”   This is regardless of whether it’s submitted by an Agent or the Client.   

When that trust is broken and the Underwriter has essentially been duped, the Insurance Company is within their rights to decline a claim per that contract.   Examples of this include classification, radius, drivers, etc.

The concept of the Owner Operator maintaining their own Primary Commercial Auto Liability and Cargo is very new.   Many Insurance Companies are not even aware that this structure exists.    

Misrepresenting Expediting to an Insurer results in confusion, lost time, delayed or denied claims, and potentially loss of the shipping account itself.

An example of this would be an Owner Op with an accident, but Cargo is salvageable.  

Who has the rights to it, the Owner Op or the Motor Carrier?     Any insurance company not fluent in Expediting will hold the cargo in storage until a great deal of time consuming inquiry is completed.  

What about defense costs?   The Owner Op has the accident, but the attorney has pulled in the Motor Carrier.   Who is defending this and where?   If it’s an Insurance Company that does not understand the risk at the time of policy application, I can assure you they will not be defending the Motor Carrier.  

What about a Liability Claim for the Owner Op that occurs outside of the radius?

“Nationwide Claims Coverage” does not mean its OK to go outside of the 300 – 500 mile limits on your policy contract….it simply means the company has Claims Representation of some type in all states.   It doesn’t mean it will cover you if you’re 1,000 miles away from home no matter what.

Most Owner Operators understand their insurance coverage needs to match their exposure, like a guy who remodels bathrooms understands he’s not covered to operate a wrecking ball.   (I actually had that case once.)

99% of Insurance Companies do not accept Expediting as a risk.   Sleep well at night.   Find insurance coverage that matches what you do.

More to come in my 3 part series, “THE MULTI” – The Good, the Bad and the Ugly.

Warm Regards,

Shelly

Shelly Benisch, CIC         [email protected]             www.MyCISagent.com