Tuesday, August 25, 2009
Monday, August 24, 2009
The Rules for Principal Place of Business
A trucker has an office in Nashville and terminals in Jackson and Seattle. What is the principal place of business? Here is what the FMCSA says:
The regulatory guidance in this notice responds to recurring questions FMCSA has received
concerning the definition of “principal place of business” in 49 CFR 390.5.
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Notice of regulatory guidance.
SUMMARY: The FMCSA announces regulatory guidance concerning its definition of “principal place of business.”
The regulatory guidance is presented in a question-and-answer format and is generally applicable to motor
carrier operations subject to the Federal Motor Carrier Safety Regulations. No prior interpretations or regulatory
guidance concerning the term “principal place of business,” whether published or unpublished, may
be relied upon as authoritative if they are inconsistent with the guidance published today. This
guidance will provide the motor carrier industry and Federal, State and local law enforcement
officials with uniform information for use in determining which locations may be designated by a
motor carrier as its principal place of business.
DATES: Effective Date: This regulatory guidance is effective on August 12, 2009.
G U I D A N C E :
Question: What location may a motor carrier
designate as its “principal place of business”?
Guidance: In instances where a motor carrier has
more than one terminal or office, the regulations do
not explicitly place a restriction on which location a
motor carrier may designate as its principal place of
business. The definition states that such a location is
“normally” the carrier's headquarters; the rule does not
require motor carriers to use the company's corporate
headquarters as its principal place of
business. However, motor carriers are limited
to using an actual place of business of the
motor carrier. Moreover, a motor carrier may
designate as its principal place of business
only locations that contain offices of the
motor carrier's senior-most management executives,
management officials or employees responsible for the
administration, management and oversight of safety
operations and compliance with the FMCSRs and
Hazardous Materials Regulations. In determining its
principal place of business, a motor carrier must
consider the following factors: (a) The relative
importance of the activities performed at each
location, and, if this factor is not determinative, then
(b) time spent at each location by motor carrier
management or corporate officers.
Question: May a motor carrier with a single business
location, including a private residence, designate a
different location as its “principal place of business”?
Guidance: No. The definition of “principal place of
business” in 49 CFR 390.5 allows a carrier with multiple terminals or offices to designate a single terminal or office as
its primary business location for identification purposes. Consistent with this definition, a motor carrier with a single
place of business may designate only its actual place of business as the “principal place of business.”
For the complete Notice, go to http://edocket.access.gpo.gov/2009/E9-18142.htm
The regulatory guidance in this notice responds to recurring questions FMCSA has received
concerning the definition of “principal place of business” in 49 CFR 390.5.
AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.
ACTION: Notice of regulatory guidance.
SUMMARY: The FMCSA announces regulatory guidance concerning its definition of “principal place of business.”
The regulatory guidance is presented in a question-and-answer format and is generally applicable to motor
carrier operations subject to the Federal Motor Carrier Safety Regulations. No prior interpretations or regulatory
guidance concerning the term “principal place of business,” whether published or unpublished, may
be relied upon as authoritative if they are inconsistent with the guidance published today. This
guidance will provide the motor carrier industry and Federal, State and local law enforcement
officials with uniform information for use in determining which locations may be designated by a
motor carrier as its principal place of business.
DATES: Effective Date: This regulatory guidance is effective on August 12, 2009.
G U I D A N C E :
Question: What location may a motor carrier
designate as its “principal place of business”?
Guidance: In instances where a motor carrier has
more than one terminal or office, the regulations do
not explicitly place a restriction on which location a
motor carrier may designate as its principal place of
business. The definition states that such a location is
“normally” the carrier's headquarters; the rule does not
require motor carriers to use the company's corporate
headquarters as its principal place of
business. However, motor carriers are limited
to using an actual place of business of the
motor carrier. Moreover, a motor carrier may
designate as its principal place of business
only locations that contain offices of the
motor carrier's senior-most management executives,
management officials or employees responsible for the
administration, management and oversight of safety
operations and compliance with the FMCSRs and
Hazardous Materials Regulations. In determining its
principal place of business, a motor carrier must
consider the following factors: (a) The relative
importance of the activities performed at each
location, and, if this factor is not determinative, then
(b) time spent at each location by motor carrier
management or corporate officers.
Question: May a motor carrier with a single business
location, including a private residence, designate a
different location as its “principal place of business”?
Guidance: No. The definition of “principal place of
business” in 49 CFR 390.5 allows a carrier with multiple terminals or offices to designate a single terminal or office as
its primary business location for identification purposes. Consistent with this definition, a motor carrier with a single
place of business may designate only its actual place of business as the “principal place of business.”
For the complete Notice, go to http://edocket.access.gpo.gov/2009/E9-18142.htm
How Truckers should keep their garage or shop
from Professional Safety
Most truckers of any size have a garage or shop to repair and maintain their equipment. Part of their requirements with the Department of Transportation is that they must maintain within published guidelines their equipment- so many try to do so at their terminal or office.
There is a general liability exposure and in certain cases a garage liability exposure when the insured has a garage or shop.
Most agents are unaware of what to advise an insured as to how to create a Best Practices approach to safety at the garage or shop. Most housekeeping safety hazards fall into one of two categories: unsafe acts and unsafe conditions.Statistics show that for every mishap caused by unsafe conditions, roughly four are caused by unsafe acts. So, it makes sense to be constantly aware of hazardous housekeeping conditions -- and actions -- both on and off the job.
So what should a trucker do? Try the following:
Keep your surrounding work area safe.
Keep your tools and working materials off the floor.
Use designated storage locations for materials and tools.
Keep briefcases, handbags & other obstacles out of the aisles.
Shut the file and desk drawers when they’re not in use.
Clean and properly maintain all safety gear.
Wipe up all spills immediately.
Stack materials properly.
Remove or repair all unsafe conditions if you are authorized to
do so.
Keep your work area secure.
Lock up before you leave.
Return all keys to authorized personnel.
Make a daily inspection of your work area and department.
Be alert to housekeeping hazards and accumulation of
combustibles that could cause a fire.
Make sure hazardous materials are properly labeled and stored
so that labels can be seen. Guard against exposure of
flammable and combustible materials to any heat source.
Put oil-, paint-, and grease-soaked rags, shavings & other highly
combustible waste in the proper waste receptacles.
Clean up safely. Never use alcohol, gasoline, or other
flammable liquid as a cleaning agent, and make sure that all
flammable liquids are stored away from direct heat and are in
proper containers.
Never block fire doors, fire extinguishers, warning signs, or
emergency exits.
Always report these housekeeping hazards:
Wet walkways
Loose or torn carpeting
Chipped tiles
Holes, trenches, open manholes
Loose tread on stairs
Objects left in aisles
Cables, hoses, or cords stretched across walkways
Poorly lit walkways or stairwells
Unsafe tools and equipment
Blocked emergency exit(s)
Most truckers of any size have a garage or shop to repair and maintain their equipment. Part of their requirements with the Department of Transportation is that they must maintain within published guidelines their equipment- so many try to do so at their terminal or office.
There is a general liability exposure and in certain cases a garage liability exposure when the insured has a garage or shop.
Most agents are unaware of what to advise an insured as to how to create a Best Practices approach to safety at the garage or shop. Most housekeeping safety hazards fall into one of two categories: unsafe acts and unsafe conditions.Statistics show that for every mishap caused by unsafe conditions, roughly four are caused by unsafe acts. So, it makes sense to be constantly aware of hazardous housekeeping conditions -- and actions -- both on and off the job.
So what should a trucker do? Try the following:
Keep your surrounding work area safe.
Keep your tools and working materials off the floor.
Use designated storage locations for materials and tools.
Keep briefcases, handbags & other obstacles out of the aisles.
Shut the file and desk drawers when they’re not in use.
Clean and properly maintain all safety gear.
Wipe up all spills immediately.
Stack materials properly.
Remove or repair all unsafe conditions if you are authorized to
do so.
Keep your work area secure.
Lock up before you leave.
Return all keys to authorized personnel.
Make a daily inspection of your work area and department.
Be alert to housekeeping hazards and accumulation of
combustibles that could cause a fire.
Make sure hazardous materials are properly labeled and stored
so that labels can be seen. Guard against exposure of
flammable and combustible materials to any heat source.
Put oil-, paint-, and grease-soaked rags, shavings & other highly
combustible waste in the proper waste receptacles.
Clean up safely. Never use alcohol, gasoline, or other
flammable liquid as a cleaning agent, and make sure that all
flammable liquids are stored away from direct heat and are in
proper containers.
Never block fire doors, fire extinguishers, warning signs, or
emergency exits.
Always report these housekeeping hazards:
Wet walkways
Loose or torn carpeting
Chipped tiles
Holes, trenches, open manholes
Loose tread on stairs
Objects left in aisles
Cables, hoses, or cords stretched across walkways
Poorly lit walkways or stairwells
Unsafe tools and equipment
Blocked emergency exit(s)
Sunday, August 2, 2009
The ISO 80% Radius Rating Rule
When agents put down the radius in the application process, they need to remember how ISO does it and also understand how your insurance company rates according to radius. Many insurance companies follow ISO rating but many other insurance companies go at it their own way.
Some companies have you rate on radius by having the requirement of classifying a vehicle based on the furthest destination. ISO looks at this way as well, but with one very important caveat.
If 80% of the trips are in a lower radius classification, you should use the lower rated classification. How should you disclose that to your underwriter?
You should use the lower radius as ISO suggests and have a note that says 20% or less or the trips are more than the radius indicated. In trucking insurance this is verified in the mileage or IFTA reports. One of the problems with mileage reports are that they are state mileage specific, and not formulated by radius. If there are miles in a certain state, the vehicle could be traveling trough more than one or two higher radius thresholds. So further underwriting relative to determining shippers and destinations is in order.
Radius underwriting in Trucking is an imperfect science. It is important to understand the ISO rule and whether the company you are submitting to concurs with the ISO 80% radius rule. How a company prices based on radius is probably as important a factor in underwriting and rating in the trucking insurance marketplace we are in.
Some companies have you rate on radius by having the requirement of classifying a vehicle based on the furthest destination. ISO looks at this way as well, but with one very important caveat.
If 80% of the trips are in a lower radius classification, you should use the lower rated classification. How should you disclose that to your underwriter?
You should use the lower radius as ISO suggests and have a note that says 20% or less or the trips are more than the radius indicated. In trucking insurance this is verified in the mileage or IFTA reports. One of the problems with mileage reports are that they are state mileage specific, and not formulated by radius. If there are miles in a certain state, the vehicle could be traveling trough more than one or two higher radius thresholds. So further underwriting relative to determining shippers and destinations is in order.
Radius underwriting in Trucking is an imperfect science. It is important to understand the ISO rule and whether the company you are submitting to concurs with the ISO 80% radius rule. How a company prices based on radius is probably as important a factor in underwriting and rating in the trucking insurance marketplace we are in.
Friday, July 24, 2009
Truck Data Worth Knowing- Q & A
from Travelers and truckinfo.net
Q- How many truckers are in America?
A- 675,000 registered trucking accounts in the US according to Travelers. truckinfo.net reports almost half of that or 360,000 companies
Q- So how many trucks operate in the US?
A- Estimates are over 15 million trucks and just under 2 million of those are tractor trailers.
Q- How much is spent on Trucking Freight annually in the US?
A- $400 billion
Q- What is the average operating ratio ( profit) for trucking companies?
A- 95.2% or a profit of 4.8 cents on every dollar
That shipping companies paying truckers to haul freight just to be specific
Q- Total Amount of cargo theft in the US?
A- $30 billion
So that means that 7.5% of trucking freight payments are eaten by the shipper, the trucker, the insurance company, or the consignee. That $30 billion is passed on to shippers and truckers in higher premiums- and to the general public. A very big deal.
What would be ideal information from an underwriting context as to the values shipped so it could be understood what percentage of values is lost.
Q- How many truckers are in America?
A- 675,000 registered trucking accounts in the US according to Travelers. truckinfo.net reports almost half of that or 360,000 companies
Q- So how many trucks operate in the US?
A- Estimates are over 15 million trucks and just under 2 million of those are tractor trailers.
Q- How much is spent on Trucking Freight annually in the US?
A- $400 billion
Q- What is the average operating ratio ( profit) for trucking companies?
A- 95.2% or a profit of 4.8 cents on every dollar
That shipping companies paying truckers to haul freight just to be specific
Q- Total Amount of cargo theft in the US?
A- $30 billion
So that means that 7.5% of trucking freight payments are eaten by the shipper, the trucker, the insurance company, or the consignee. That $30 billion is passed on to shippers and truckers in higher premiums- and to the general public. A very big deal.
What would be ideal information from an underwriting context as to the values shipped so it could be understood what percentage of values is lost.
Thursday, July 23, 2009
Progressive?
Progressive Insurance Company is a very good marketing company and would like the public to think that the transportation insurance marketplace is their oyster.
Recently they did two things that created a new level of hubris.
First of all they have advertised that they are the largest writer of commercial truck policies than any other carrier. They mention policies, not operating units or radius ( they do no long haul) or classes.
Secondly, they have introduced an any auto endorsement. Here is the advertisement
" Imagine this scenario -- a customer has commercial auto insurance for his small business. Before it's time to renew his policy, he buys a new truck, forgets to notify his insurance agent about it so that the agent can update his policy. Then the customer causes an accident.
"A scenario like that could raise errors and omissions issues for independent insurance agents," said Mike Miller with Progressive's commercial auto insurance group. But, according to Miller, a new endorsement -- Any Auto Liability -- could limit the agent's exposure.
"An Any Auto Liability endorsement from Progressive can limit E&O exposure in those situations by filling the gap created when commercial auto insurance customers get new vehicles but don't update their policy until it's time to renew," Miller said"
All sounds good until you have a start up insured buy 1 unit, fail to add 10 units and show up at renewal with 11. Can you imagine the missed premium and the audit issues. It will be interesting to see
Recently they did two things that created a new level of hubris.
First of all they have advertised that they are the largest writer of commercial truck policies than any other carrier. They mention policies, not operating units or radius ( they do no long haul) or classes.
Secondly, they have introduced an any auto endorsement. Here is the advertisement
" Imagine this scenario -- a customer has commercial auto insurance for his small business. Before it's time to renew his policy, he buys a new truck, forgets to notify his insurance agent about it so that the agent can update his policy. Then the customer causes an accident.
"A scenario like that could raise errors and omissions issues for independent insurance agents," said Mike Miller with Progressive's commercial auto insurance group. But, according to Miller, a new endorsement -- Any Auto Liability -- could limit the agent's exposure.
"An Any Auto Liability endorsement from Progressive can limit E&O exposure in those situations by filling the gap created when commercial auto insurance customers get new vehicles but don't update their policy until it's time to renew," Miller said"
All sounds good until you have a start up insured buy 1 unit, fail to add 10 units and show up at renewal with 11. Can you imagine the missed premium and the audit issues. It will be interesting to see
Friday, July 17, 2009
Trucking Trends- Better Drivers and Better Equipment on the Road/ Less Severity
From Professional Safety
According to the Commercial Vehicle Saftey Alliance Roadcheck 2009, there were declines in the vehicle and driver Out of Service rates(OOS) versus last year. The numbers:
Drivers- 4.4% of drivers were OOS versus 5.3% in 2008
Equipment- 19.6% of vehicles were OOS versus 20.8% in 2008
While the differences are not huge they do show trucking is getting better and more compliant
At the same time the US DOT announced that traffic fatalities reached a record low. The fatality rate is 1.27 fatalities per 100 million vehicle miles traveled. This represents a 9% decline from the previous year
What does this mean respects trucking insurance today?
Most insurance capacity is geared for the better truckers. So as you can see trucking operations are getting better and better. So for the truckers who are able to endure in this economy, the trend is that their operation will be better
Also less severity means there is a better chance for underwriting profit so look for a continued softness and reduced pricing
According to the Commercial Vehicle Saftey Alliance Roadcheck 2009, there were declines in the vehicle and driver Out of Service rates(OOS) versus last year. The numbers:
Drivers- 4.4% of drivers were OOS versus 5.3% in 2008
Equipment- 19.6% of vehicles were OOS versus 20.8% in 2008
While the differences are not huge they do show trucking is getting better and more compliant
At the same time the US DOT announced that traffic fatalities reached a record low. The fatality rate is 1.27 fatalities per 100 million vehicle miles traveled. This represents a 9% decline from the previous year
What does this mean respects trucking insurance today?
Most insurance capacity is geared for the better truckers. So as you can see trucking operations are getting better and better. So for the truckers who are able to endure in this economy, the trend is that their operation will be better
Also less severity means there is a better chance for underwriting profit so look for a continued softness and reduced pricing
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