Acts of God- It's Time to Get Some Religion

A friend of mine at RLI sent me an article from e-trucker.com and truck legal pro Henry E. Seaton that gave me a bit of pause- and educated & challenged my knowledge of coverage. As you may know we have had a little rain here in Nashville and I have often been accused of being all wet. Here is what I know and learned:

What is an Act of God relative to weather ( note there are Acts of God that are not weather related which I will not bore you with)?

Henry's great definition is that Acts of God are weather conditions of epic proportions - like tornados,floods, hurricanes etc...

Are trucker's insured for Acts of God? Not typically. Remember motor truck cargo is third party legal liability coverage and the trucker is not legally responsible if the proximate cause of loss was an act of god.

Are trucker's normally held legally liable for acts of God? Again no but there are exceptions( an exception would be that the trucker parked in a known flood plain, knew of a big storm coming, and did squat so that everything flooded- so he became liable due to neglect).

But will insurance company pay for Acts of God losses? Yes but not unequivocably. Note if you look at the industry standard AAIS coverage form for motor truck cargo, there is no exclusion for acts of god per se ( although there are many exclusions).

One of the challenges we see daily is that truckers will sign darn near any type of agreement from the shipper to get the business. Frequently those agreements require indemnification, limits of insurance, and unfortunately that the trucker is responsible for all loss or damage. Regrettably that has nothing to do with negligence so you could easily have a situation where the insured is responsible and the insurance carrier shows up with no coverage.

That is why the coverage form is so important. What we want to see happen is that if it is on our truck that the insurance company pays. Period. The reason is that the shippers want the truckers to be responsible. Most insurance carriers pay for a loss where the property:

* was under your care custody and control
AND
* the insured was legally liable

Where does coverage for Acts of God put an agent? In a potential E & O situation .
If a trucker sends you a shipper- carrier contract and it says the insured is responsible for all losses period, you should point out that he may not have coverage for acts of god ( and highlight the exclusions).

Note my viewpoint should not be construed as gospel and considered pejorative- but is based on many years experience writing motor truck cargo business and witnessing claims. Each insurance carrier will have their own take and you should ask them.