Risky Business
Understand Your Carrier Contract Deductibles
Hi everyone, It's no mystery that when times are tough we all look for ways to protect ourselves from losing money. I must have received 10 calls from Leased on Owner Operators this past month on the issue of how much they're liable to their Carrier if they get into an accident....
As is often the case, the financial hardship of the deductible(s) in your contract is not a concern until a loss occurs. The relationship between the Owner Operator and the Carrier becomes strained and sometimes ends up irreconcilable.
It's important to understand your responsibilities under your contract with your carrier regarding how much out of pocket you can expect to have in the event of an accident. If you think it might be tough to swing the deductible they're asking of you, that's what insurance is for.
For example, it's simple and inexpensive to buy your own small $10,000 Cargo policy to fill in a high deductible gap by choosing a more manageable $1,000 or $500 deductible.
If you have a cargo van or sprinter, you can just add it onto your current Expediting policy you carry. If you're a Straight or Tractor operator, it's a simple standalone policy.
Most importantly, if you have a Cargo Van or Sprinter with properly aligned Primary coverage, then your own insurance carrier will pay out for your Liability whether you're under dispatch or not....there is no deductible.
Straights and Tractors with Non-Truck Liability will only pay your damages while not under dispatch, so the loss falls over to the Carrier with your deductible responsibility posted in your contract. If you're carrying your own Primary Liability instead of Non-Truck Liability…again your deductible is zero.
So in a nutshell, deductibles can vary greatly from Carrier to Carrier, but with clear communication via your contract it’s easy to mitigate your losses with proper insurance structuring before a loss happens.
Shelly Benisch, CIC
Commercial Inurance Solutions, Inc.