Risky Business
When Primary Doesn't Pay Primary
Hi Everyone,
I thought I’d spend the next few weeks writing about “confusing insurance termsâ€â€¦sometimes we THINK we know what something means…but we’re off the mark.
Today I’ll talk about Primary Liability.
It seems pretty straightforward…“I’ve paid
for Primary Liability, so my Insurance pays FIRST if I cause an accident.â€
No, your Primary Liability only pays FIRST if the insurance form it’s written on has been broadened by contract to include “Non-Contributory.†In 99% of Insurance Contracts, Primary has NOT been broadened to include this extension of coverage.
So if you’re an Owner Operator who has bought a policy that says “Primary†from most Insurance Companies, then Caveat Emptor….buyer beware.
If you cause an accident, your insurance company will first search for coverage from the Motor Carrier(s) per THEIR insurance contract, because that’s where THEIR form says the coverage SHOULD be. They are then within their rights to delay the claim for discovery, or decline the claim for fraud.
I guess it’s kind of like the guy who says, “Oh, yes, I let my friend drive my car, but he said if anything happens he’d make sure the insurance falls on his insurance, not mine.†Hmmmmm….No, that’s not how it works, it’s the insurance company CONTRACTS that decide what gets paid where, not us.
Expediters are NOT local Couriers. An MC number doesn’t
come into play for Couriers, but IT DOES for Expediters.
So don’t assume that a policy designed for local package delivery or auto parts delivery will pay when you have a claim. For example, when you live in South Carolina and have an accident in Texas you're clearly not a Courier...and you can expect serious problems.
“Multi†Owner Operators with the wrong coverage are exposing themselves, their Motor Carriers and Shippers to loss when "Primary doesn't pay Primary.
Next blog I’ll talk about Hired/Nonowned Auto, what it
covers and what it doesn’t.
Warm Regards,
Shelly Benisch, CIC [email protected] www.MyCISagent.com