Overdrive Magazine

July 2019

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26 | Overdrive | July 2019 T he biggest chunk of an independent's insurance costs is liability coverage, which pays for injuries and property damage from a wreck. For over-the-road drivers, the Federal Motor Carrier Safety Administration requires $750,000 in pri- mary or auto liability coverage. However, most shippers and brokers do not do business with trucking companies that carry less than $1 million in liability coverage. Certain hazmat haulers, especially those hauling chemicals, are required to have $5 million in liability coverage. Liability coverage costs have increased markedly. Premiums for a $1 million liability policy now can range from around $6,000 to $16,000 or more a year. The 2008 recession caused insurance companies to reduce premiums, says Bob Holtzman, president of California-based Western Truck Insurance Services. "The marketplace was competing for what business was still there, and rates got really low," he says. As the econ- omy rebounded, he adds, insurers were slow to react and started taking losses "well in excess of premiums." In the last three to four years, insurers increased rates. Holtzman says rates are now much higher than the low that was seen around 2011 and are expected to remain at HIGH LIABILITY RATES BECOMING THE NORM While auto liability is the only type of liability insur- ance required by FMCSA, other forms of liability insurance can further protect independents. GENERAL LIABILITY insurance covers incidents that the driver is responsible for that happen away from the insured vehicle. If you travel with a four- legged furry companion, this type of insurance would cover you if your pet were to bite someone. CARGO LIABILITY covers anything that happens to the cargo while in transit. Auto liability typically doesn't cover damage to the cargo, so cargo liability insurance covers that gap in case of damage from an accident, fire, theft, reefer breakdown and more. POLLUTION LIABILITY is an option for hazmat haulers. Depending on the insurance company, cover- age for pollution, usually defined as a continuous seep- age, can be added as an endorsement to an existing liability policy or it can be purchased separately. Other forms of liability insurance Frequent driving into large cities is one of many factors that can drive up an operator's liability insurance. This photo, published in Overdrive in 2013, shows a Western Star LowMax owned by Pete Demarest negotiating the streets of Manhattan, one of Demarest's desti- nations for hauling equipment for big entertainment productions. BY MATT COLE

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