from Insurance Journal
The Obama administration has agreed to reconsider a rule that allows long-haul truckers to drive for up to 11 hours straight, bowing to safety advocates who say longer hours could lead to greater fatigue and more accidents.
The Federal Motor Carrier Safety Administration signed an agreement late Monday with safety and labor groups pledging to revise the rule that became final in the waning days of the Bush administration.
"We believe that starting over and developing a rule that can help save lives is the smart thing to do,'' said Transportation Secretary Ray LaHood.
For 60 years, truckers were allowed to drive a maximum of 10 hours at a time. The Bush administration and the trucking industry wanted to let truckers have an extra hour of driving time. The rule also cut rest and recovery time at the end of a work week from 50 or more hours off duty to as little as 34 hours off-duty.
The transportation agency isn't saying exactly what it will do, but opponents of expanded hours are hopeful a new rule will be closer to the original limits.
"We are pleased that the government has decided to take seriously its responsibility to protect truck drivers and the public from unsafe driving conditions instead of bending to the interests of the trucking industry,'' said Greg Beck, an attorney for the consumer group Public Citizen.
The FMCSA says it will propose a new rule within the next nine months.
A federal appeals court struck the rule down twice, saying the government did not adequately explain its reasoning for adding the extra hour. But the Bush administration reinstated the rule each time.
Public Citizen, Parents Against Tired Truckers, Citizens for Reliable and Safe Highways, Advocates for Highway and Auto Safety and the International Brotherhood of Teamsters sued to get the rule thrown out.
"We will continue to push for a rule that protects trucks drivers, instead of the greed of the trucking industry,'' said Teamsters president Jim Hoffa. "Longer hours behind the wheel are dangerous for our members and the driving public.''
Clayton Boyce, spokesman for American Trucking Associations, said the number of truck-involved fatalities and injuries on highways has decreased since the new rules took effect.
"It's been shown during that time that the rules as they are constructed are safe,'' Boyce said.
Thursday, October 29, 2009
Monday, October 26, 2009
The National Electric Code
Frequently we see losses, especially during road paving season where the insured tops a bridge or in this case a electric conductor. Most insurance carriers simply pay for the losses and many times the trucker is not liable. Here is why:
Truckers are typically allowed ( depending on the state) to be able to haul a load that measures 16'6" if traveling on a non-restricted highway. The National Electric Code requires vertical clearance from the ground service conductors have to have a minimum clearance of 18 feet. Many installers do not follow the rules and as such if a service conductor were hit that was less than this height, the trucker would not be legally liable.
When roads are paved, sometimes they are not scraped and as such the distance from the road to the bridges or overhangs are reduced. This leads to more claims where a trailer tops the structure. Do not always assume your insured is legally liable especially on a non-restricted highway.
Truckers are typically allowed ( depending on the state) to be able to haul a load that measures 16'6" if traveling on a non-restricted highway. The National Electric Code requires vertical clearance from the ground service conductors have to have a minimum clearance of 18 feet. Many installers do not follow the rules and as such if a service conductor were hit that was less than this height, the trucker would not be legally liable.
When roads are paved, sometimes they are not scraped and as such the distance from the road to the bridges or overhangs are reduced. This leads to more claims where a trailer tops the structure. Do not always assume your insured is legally liable especially on a non-restricted highway.
Friday, October 23, 2009
State of Transportation Insurance- October 2009
from American Agent and Broker
Double-digit rate decreases are nearing the end in transportation insurance, after a long stretch of declines. The market appears to be in a transitional phase as established transportation underwriters attempt to hold the line on rates for key business. While it is too early to tell, this may be encouraging news for commercial insurance agents and brokers nationwide because the transportation insurance market tends to act as a leading indicator of the direction of rates in the general commercial insurance market.
The recently published results of NIP Group’s Transportation Insurance Pricing Survey (TIPS) provide statistics to support this theory. The survey (available at http://www.nipgroup.com/SurveyResults.aspx) benchmarks changes in rates and availability in the transportation insurance market. Every quarter, TIPS questions the nation’s leading transportation insurance brokers, wholesalers and underwriters representing thousands of accounts. Respondents provide detailed information about trends they see with the rates on their accounts based on size, transportation industry segment and coverage type.
TIPS results from the second quarter of 2009 indicate that rate decreases are starting to level off, with rates down on average between 1 and 10 percent. In addition, more participants have reported modest rate increases across several segments, account sizes and lines of coverage during the second quarter. New insurance carrier entrants also are gaining market share as established transportation underwriters try to hold the line on rates and are less likely to lower rates significantly below expiring levels.
The majority of respondents believe rates in the transportation insurance market are beginning to moderate as observed by the slight firming of auto liability and motor truck cargo rates.
The driving forces
There are a number of factors that have joined together and contributed to the persistent downward pressure on both transportation rates and premiums during the past few years. Competition for premium dollars, the economic crisis, even advances in safety technology all have helped drive rates down. Though individual clients will be affected by different issues, one thing remains constant: The competition and mixed signals on rates raise uncertainty for brokers, adding to their anxiety.
Intense competition
The main factor that has driven rates to possibly unprofitable levels has been competition among insurance carriers.Transportation insurance is more widely available today as more insurers have entered the market than have exited it over the past 2 years.
In addition to contending with more entrants in the space, there is fierce competition among the key players for premium and accounts, with insurers and brokers focused on keeping their business. To make matters worse, several TIPS survey respondents indicated that in some cases underwriting standards are being compromised. One respondent reported seeing pricing wars among trucking markets, and that “underwriting seems to have taken a back seat in the fight for market share.”
Another survey participant’s comments clearly communicate frustration with the current situation: “More companies are writing the class but less are underwriting the class. That’s one of the problems in today’s market. If more insurers were underwriting and pricing based on the true potential profitability of the account, we would be able to get increased pricing on accounts that deserve to pay more.”
From an underwriter’s perspective, this continues to be a very challenging environment in which to underwrite and price business. Rates are low, competition is fierce for almost every account, the number of clients and their exposures are shrinking and claim costs continue to rise. They are feeling the pressure.
Economic pressure
Due to the recession, many transportation companies, especially truckers, have been forced to downsize their operations because of decreased demand for their services. There are fewer trucks and employees to insure, resulting in less demand for insurance capacity, which has kept renewal premiums down, even in cases where carriers have been successful in increasing rates. As one TIPS respondent noted, “Premiums are continuing to drop, but mainly because of decreases in exposures. Rates are actually flat to small increases, so the premium drops are usually based on the exposures decreasing drastically.”
Today, trucking companies have thinner margins and many are having more difficulty managing their cash flow. Last year, they first struggled with soaring fuel prices, which seriously damaged profits, and then had to deal with the effects of the worsening recession. According to the American Transportation Research Institute’s “Analysis of the Operational Costs of Trucking,” fuel costs make up nearly 40 percent of the total operational costs of trucking. When oil prices spiked to record highs of more than $140 per barrel in July 2008, it put tremendous pressure on the entire transportation industry, with trucking companies feeling it worst of all.
By the end of the year, fuel prices had come down substantially, but the nation was well into the worst recession in decades. Retailers are experiencing sluggish sales, a problem that may continue for a while. Low retail sales mean fewer items to ship which translates into fewer trips on the road, especially for long-haul truckers.
If there is a silver lining for transportation insurance brokers in this cloudy market, it is that the competitive market enables them to help clients lower their costs so they can survive this extremely difficult point in the business cycle.
New technology
In recent years, there have been many technological advances in equipment that trucking companies can use for safety and logistical purposes. The improvements in safety technology have had a direct impact on insurance rates for a number of reasons.
Frequency of claims continues to decrease as more and more trucks are equipped with the latest safety devices. Systems such as Drivecam (on-board recording of driver behavior) keep drivers in check, encouraging them to operate more safely when on the road. Also, enhanced braking technologies enable trucks to stop faster and handle better, which has helped reduce accidents and save lives. These types of improvements lower rates for insureds in the long run.
Carriers also are offering upfront rate discounts for fleets for investing in these types of safety advances.
In these uncertain times, the general consensus among experts is that no one knows for sure what will happen with rates in the commercial insurance market. However, as demonstrated by TIPS, many market participants believe that rates in the transportation corner of the market are starting to level off, so there is hope in the industry that this is the beginning of general upward trend.
Double-digit rate decreases are nearing the end in transportation insurance, after a long stretch of declines. The market appears to be in a transitional phase as established transportation underwriters attempt to hold the line on rates for key business. While it is too early to tell, this may be encouraging news for commercial insurance agents and brokers nationwide because the transportation insurance market tends to act as a leading indicator of the direction of rates in the general commercial insurance market.
The recently published results of NIP Group’s Transportation Insurance Pricing Survey (TIPS) provide statistics to support this theory. The survey (available at http://www.nipgroup.com/SurveyResults.aspx) benchmarks changes in rates and availability in the transportation insurance market. Every quarter, TIPS questions the nation’s leading transportation insurance brokers, wholesalers and underwriters representing thousands of accounts. Respondents provide detailed information about trends they see with the rates on their accounts based on size, transportation industry segment and coverage type.
TIPS results from the second quarter of 2009 indicate that rate decreases are starting to level off, with rates down on average between 1 and 10 percent. In addition, more participants have reported modest rate increases across several segments, account sizes and lines of coverage during the second quarter. New insurance carrier entrants also are gaining market share as established transportation underwriters try to hold the line on rates and are less likely to lower rates significantly below expiring levels.
The majority of respondents believe rates in the transportation insurance market are beginning to moderate as observed by the slight firming of auto liability and motor truck cargo rates.
The driving forces
There are a number of factors that have joined together and contributed to the persistent downward pressure on both transportation rates and premiums during the past few years. Competition for premium dollars, the economic crisis, even advances in safety technology all have helped drive rates down. Though individual clients will be affected by different issues, one thing remains constant: The competition and mixed signals on rates raise uncertainty for brokers, adding to their anxiety.
Intense competition
The main factor that has driven rates to possibly unprofitable levels has been competition among insurance carriers.Transportation insurance is more widely available today as more insurers have entered the market than have exited it over the past 2 years.
In addition to contending with more entrants in the space, there is fierce competition among the key players for premium and accounts, with insurers and brokers focused on keeping their business. To make matters worse, several TIPS survey respondents indicated that in some cases underwriting standards are being compromised. One respondent reported seeing pricing wars among trucking markets, and that “underwriting seems to have taken a back seat in the fight for market share.”
Another survey participant’s comments clearly communicate frustration with the current situation: “More companies are writing the class but less are underwriting the class. That’s one of the problems in today’s market. If more insurers were underwriting and pricing based on the true potential profitability of the account, we would be able to get increased pricing on accounts that deserve to pay more.”
From an underwriter’s perspective, this continues to be a very challenging environment in which to underwrite and price business. Rates are low, competition is fierce for almost every account, the number of clients and their exposures are shrinking and claim costs continue to rise. They are feeling the pressure.
Economic pressure
Due to the recession, many transportation companies, especially truckers, have been forced to downsize their operations because of decreased demand for their services. There are fewer trucks and employees to insure, resulting in less demand for insurance capacity, which has kept renewal premiums down, even in cases where carriers have been successful in increasing rates. As one TIPS respondent noted, “Premiums are continuing to drop, but mainly because of decreases in exposures. Rates are actually flat to small increases, so the premium drops are usually based on the exposures decreasing drastically.”
Today, trucking companies have thinner margins and many are having more difficulty managing their cash flow. Last year, they first struggled with soaring fuel prices, which seriously damaged profits, and then had to deal with the effects of the worsening recession. According to the American Transportation Research Institute’s “Analysis of the Operational Costs of Trucking,” fuel costs make up nearly 40 percent of the total operational costs of trucking. When oil prices spiked to record highs of more than $140 per barrel in July 2008, it put tremendous pressure on the entire transportation industry, with trucking companies feeling it worst of all.
By the end of the year, fuel prices had come down substantially, but the nation was well into the worst recession in decades. Retailers are experiencing sluggish sales, a problem that may continue for a while. Low retail sales mean fewer items to ship which translates into fewer trips on the road, especially for long-haul truckers.
If there is a silver lining for transportation insurance brokers in this cloudy market, it is that the competitive market enables them to help clients lower their costs so they can survive this extremely difficult point in the business cycle.
New technology
In recent years, there have been many technological advances in equipment that trucking companies can use for safety and logistical purposes. The improvements in safety technology have had a direct impact on insurance rates for a number of reasons.
Frequency of claims continues to decrease as more and more trucks are equipped with the latest safety devices. Systems such as Drivecam (on-board recording of driver behavior) keep drivers in check, encouraging them to operate more safely when on the road. Also, enhanced braking technologies enable trucks to stop faster and handle better, which has helped reduce accidents and save lives. These types of improvements lower rates for insureds in the long run.
Carriers also are offering upfront rate discounts for fleets for investing in these types of safety advances.
In these uncertain times, the general consensus among experts is that no one knows for sure what will happen with rates in the commercial insurance market. However, as demonstrated by TIPS, many market participants believe that rates in the transportation corner of the market are starting to level off, so there is hope in the industry that this is the beginning of general upward trend.
Sunday, October 18, 2009
New Driver Pre-Employment Screening Program
From Professional Safety
U.S. Transportation Secretary Announces Driver Pre-Employment Screening Program
The Federal Motor Carrier Safety Administration (FMCSA) announced October 7, 2009 that it will launch a new Driver Pre-Employment Screening Program which will allow commercial motor carrier companies to electronically access driver inspection and crash records as a part of the hiring process. The program is expected to begin in December 2009.
By using driver safety information during pre-employment screening, motor carriers will be able to better assess potential safety risks of a prospective driver-employee, and drivers will have additional opportunities to verify the data in their driving history and correct any discrepancies.
Commercial driver safety records are currently available to federal and state law enforcement personnel, and accessible to drivers through the Freedom of Information Act (FOIA). Once the pre-employment screening program is launched, driver safety records will be readily available to motor carriers regardless of state or jurisdiction. In accordance with federal privacy laws, drivers must first give written consent in order for their records to be released.
The Driver Pre-Employment Screening Program will be populated by FMCSA’s Motor Carrier Management Information System (MCMIS). The MCMIS is comprised of driver performance data including roadside inspection and compliance review results, enforcement data, state-reported crashes, and motor carrier census data.
U.S. Transportation Secretary Announces Driver Pre-Employment Screening Program
The Federal Motor Carrier Safety Administration (FMCSA) announced October 7, 2009 that it will launch a new Driver Pre-Employment Screening Program which will allow commercial motor carrier companies to electronically access driver inspection and crash records as a part of the hiring process. The program is expected to begin in December 2009.
By using driver safety information during pre-employment screening, motor carriers will be able to better assess potential safety risks of a prospective driver-employee, and drivers will have additional opportunities to verify the data in their driving history and correct any discrepancies.
Commercial driver safety records are currently available to federal and state law enforcement personnel, and accessible to drivers through the Freedom of Information Act (FOIA). Once the pre-employment screening program is launched, driver safety records will be readily available to motor carriers regardless of state or jurisdiction. In accordance with federal privacy laws, drivers must first give written consent in order for their records to be released.
The Driver Pre-Employment Screening Program will be populated by FMCSA’s Motor Carrier Management Information System (MCMIS). The MCMIS is comprised of driver performance data including roadside inspection and compliance review results, enforcement data, state-reported crashes, and motor carrier census data.
Friday, October 9, 2009
Coverage Question- Cargo loss from a hole in the trailer
From Fireman's Fund
Wetness is a common exclusion under motor truck cargo. Note the attached question relative to insurance and the legal liability of the trucker.
If water enters a dry van trailer, due to a hole, would cargo coverage apply to damaged product as a result of the water? Would an insured be
legally liable for the damage sustained due to the hole in trailer? Or, would the claim be denied by application of the above "Causes of Loss Not Covered" item?
• Specifically, if water entered a dry van trailer, due to a hole, would cargo coverage apply to damaged product as a result of the water?
No. The policy specifically excludes damage caused by rain.
• Would an insured be legally liable for the damage sustained due to the hole in trailer.
Yes. The insured is legally liable for damages sustained to cargo while in their possession as a carrier for hire, unless there is a valid defense to liability.
• Or, would the claim be denied by application of the above "Causes of Loss Not Covered" item?
Yes. If water enters thru a hole in the trailer, the policy exclusion would apply and the claim would be denied.
The assured would be legally liable for ANY water damage to cargo sustained while in their possession, whether the water came in thru a hole in the container, or got on the cargo some other way. Motor carriers are responsible for prompt & safe delivery of all goods entrusted to them for shipment. If during the transit, there is a collision or impact or some other event or occurrence that causes physical damage to the container/trailer resulting in a hole in that container/trailer that lets in the water, the assured would be legally liable for the damages to cargo, and would also have coverage under the policy. An example of this would be driver hitting a low handling limb that rips a hole in the trailer, or collision with another vehicle or stationary object. These are examples of situations where there is both (1) legal liability on the part of the assured and (2) coverage under the motor truck cargo policy.
If an insured transports a load of goods in a trailer that has a hole in it, and there is no covered event that created the hole or opening, then there is no coverage under the motor truck cargo policy, but assured would very likely still be legally liable for the damages to cargo, unless the assured could show that the shipper was at fault for improper maintenance of a shipper-owned container. Proper maintenance of the trailers/containers is key to avoiding this type of exclusion being applied in a loss event.
Wetness is a common exclusion under motor truck cargo. Note the attached question relative to insurance and the legal liability of the trucker.
If water enters a dry van trailer, due to a hole, would cargo coverage apply to damaged product as a result of the water? Would an insured be
legally liable for the damage sustained due to the hole in trailer? Or, would the claim be denied by application of the above "Causes of Loss Not Covered" item?
• Specifically, if water entered a dry van trailer, due to a hole, would cargo coverage apply to damaged product as a result of the water?
No. The policy specifically excludes damage caused by rain.
• Would an insured be legally liable for the damage sustained due to the hole in trailer.
Yes. The insured is legally liable for damages sustained to cargo while in their possession as a carrier for hire, unless there is a valid defense to liability.
• Or, would the claim be denied by application of the above "Causes of Loss Not Covered" item?
Yes. If water enters thru a hole in the trailer, the policy exclusion would apply and the claim would be denied.
The assured would be legally liable for ANY water damage to cargo sustained while in their possession, whether the water came in thru a hole in the container, or got on the cargo some other way. Motor carriers are responsible for prompt & safe delivery of all goods entrusted to them for shipment. If during the transit, there is a collision or impact or some other event or occurrence that causes physical damage to the container/trailer resulting in a hole in that container/trailer that lets in the water, the assured would be legally liable for the damages to cargo, and would also have coverage under the policy. An example of this would be driver hitting a low handling limb that rips a hole in the trailer, or collision with another vehicle or stationary object. These are examples of situations where there is both (1) legal liability on the part of the assured and (2) coverage under the motor truck cargo policy.
If an insured transports a load of goods in a trailer that has a hole in it, and there is no covered event that created the hole or opening, then there is no coverage under the motor truck cargo policy, but assured would very likely still be legally liable for the damages to cargo, unless the assured could show that the shipper was at fault for improper maintenance of a shipper-owned container. Proper maintenance of the trailers/containers is key to avoiding this type of exclusion being applied in a loss event.
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