Commercial Carriers Insurance Agency

HOW MUCH IS ENOUGH?

H.R.6884 Fair Compensation for Truck Crash Victims Act is a bill that attempts to raise the existing minimum insurance requirements for commercial truckers from $750,000 to $5 million.

H.R.6884 was referred to and introduced into the House of Representatives on December 22 by Rep. Jesus “Chuy” Garcia (D-Ill.). This is the third such attempt at increasing liability minimums by the Representative. Garcia believes current minimums are not adequate to cover today’s medical costs and potential losses from serious crashes. The $5 million figure would also be indexed for inflation.
Numerous crash studies over the years have placed the majority of fault (up to 91%) on the four-wheeling public yet a minimum insurance increase is only being considered for commercial carriers. Every crash, every fatality and every injury is a tragedy, but laying blame, guilt and burden solely on motor carriers does not seem to fit the bill. There is no data to corroborate that raising minimums would improve safety as the Representative claims it would.
According to a researcher at the University of Michigan Transportation Research Institute, “The actions of other vehicles on the road contribute substantially to the toll. Even if all trucks were operated perfectly, only a minority of the fatal crashes would be eliminated.”

More than one study by the Department of Transportation acknowledges the disparity in fault between commercial trucks and the motoring public and went as far as listing the unsafe driving acts of those car drivers in the study, here are the top 10:

1. Driving inattentively (e.g., reading, talking on the phone, fatigue-induced)
2. Merging improperly into traffic, causing a truck to maneuver or brake quickly
3. Failure to stop for a stop sign or light (also, early or late through a signal)
4. Failure to slow down in a construction zone
5. Unsafe speed (e.g., approaching too fast from the rear/misjudging truck’s speed)
6. Following too closely
7. Failure to slow down in response to environmental conditions (e.g., fog, rain, smoke, bright sun)
8. Changing lanes abruptly in front of a truck
9. Driving in the “no zones” (left rear quarter, right front quarter, and directly behind)
10. Unsafe turning, primarily insufficient headway

In 2020, instead of a standalone bill, Garcia added a provision as part of the highway bill that would have increased insurance minimums. That provision was supported by Democrats in the House but ultimately failed in the Senate. Truckers are urged to stay vigilant on this issue and let their voices be heard by contacting their lawmakers and encouraging them to oppose Garcia’s bill.
We will keep you posted if/when this bill moves at all. Source: H.R.6884

President Biden is set to sign an executive order that looks to bolster the Department of Homeland Security’s authority to address maritime cyber threats which can cause just as much, if not more, damage than a storm or another physical threat.

The Coast Guard will also issue a notice of proposed rulemaking to establish minimum cybersecurity requirements that meet international and industry-recognized standards to best manage cyber threats.

“There’s a reason that we not only are issuing cybersecurity minimum requirements for ports, but also putting in place a maritime directive focused on cyber risk management for ship-to-shore cranes manufactured by China.” That was a comment from Anne Neuberger, U.S. Deputy National Security Advisor for Cyber and Emerging Technologies.

Chinese-manufactured ship-to-shore cranes make up the largest share of the global market and account for nearly 80% (nearly 200) of cranes at U.S. ports. By design, these cranes may be controlled, serviced, and programmed from remote locations. These features potentially leave Chinese-manufactured cranes vulnerable to exploitation.

In July last year, one of Japan’s largest ports, the port of Nagoya, fell victim to a cyber attack which caused a massive system failure and disrupted operations at container terminals in the port.

According to Neuberger, the Biden administration has been working on this notice of proposed rulemaking and executive order for the last 18 months. Additionally, she said that while it certainly ties to particular concerns about Chinese cyber activity, they also have concerns regarding criminal activity.

Our claims professionals are always looking out for the best interests of all parties along the insurance process. While the following issue has not risen to the status of a claims trend, it is alarming due to the potential for a nuclear verdict.

Knowing what’s at stake by hiring a driver to work for you is something both you and your insurance professional should have discussed. However, when a carrier goes against the advice of that professional and/or operates contrary to the stipulations in their insurance contract, they are creating additional exposure that could lead to a claim of negligence.

A claim for negligent entrustment arises when one party is held liable for negligently giving someone else a “dangerous instrumentality” with which that person causes injury to a third party. This could be interpreted as an employer entrusting a driver with a vehicle with which that driver isn’t operating responsibly. It could also be interpreted as an employer allowing a driver to operate their vehicle that the driver is not qualified to operate.

A claim for negligent hiring arises when an employer knew or should have known of an employee’s potential risk to cause harm, or if the risk would have been discovered by a reasonable investigation.

Please review the scenarios below that could be labeled as irresponsible and create unnecessary exposure.

• Do you have drivers (often part-time) delivering your loads that your insurance company does not know about? You should be notifying your insurance agent about all your drivers. Your agent knows your policy better than you and if there is an issue with that driver or the policy, they will notify you of the risk or help to deal with that exposure.
• Are your drivers allowing passengers to ride along in their vehicle during on-duty time? Many commercial insurance policies have exclusions for passengers, most notably family members. If you’re not sure, ask your agent before allowing passengers and instruct your drivers accordingly.
• Do your drivers have the proper license type to operate your vehicles and is it valid? Obtaining MVRs at least annually for your drivers is a legal requirement to stay compliant with FMCSA guidelines. However, anything can change within a year, and verifying the validity of those licenses periodically is just good business practice. Drivers don’t always self-update with changes.
• Are your driver’s medical cards current? This is something to stay on top of. Should your driver have a medical event while driving that would have excluded them from being behind the wheel, you could have a claim that will quickly escalate.

You and your insurance professionals are on the same team and need to be on the same page with your operational exposure. If you are ever in doubt about coverage, don’t just chance it, give them a call.

The California Trucking Association’s case against California’s Independent Contract rule (AB5) has taken a big hit.

In April, the U.S. Court of Appeals for the Ninth Circuit ruled 2-1 to remove the current preliminary injunction against AB5. Following that ruling, the Association filed a petition to the U.S. Supreme Court. The Supreme Court, instead of making a decision to hear the case, asked the U.S. Solicitor General to weigh in. After months of silence, the Solicitor General has returned with the conclusion that AB5 would not have a significant impact on prices, routes or services and that further review is unwarranted.

This is not just a California issue. As noted in CTA’s brief to the Supreme Court: AB-5 applies to all drivers while operating in California including those from out-of-state. Accordingly, AB-5 would require all carriers and their drivers to comply with California’s laws for employees. AB-5 therefore would obligate carriers to either — use an employee driver for the entire trip (even if the driver could lawfully operate as an owner-operator in other states) or — incur the expense and delay of transferring the freight to a truck driven by an employee when the freight enters California or to a truck owned by an owner-operator when the freight leaves California. The government makes no attempt to explain how this problem could be addressed.

It is unclear whether or not the Supreme Court will still hear the case or take the advice of the Solicitor General and let the Ninth Circuit’s ruling stand. If the Supreme Court denies review, AB5 will be implemented in the state’s trucking sector immediately. Should the Supreme Court choose to review the case, there is no timeline for completion.

Summer adjournment is at the end of June, but there is no guarantee that the court will make a decision by that time. In that case, a decision would carryover into the next court session which begins in October.

Comment period extended to July 18

The FMCSA is intent on implementing a speed limiter rulemaking. The proposed rule targets motor carriers operating commercial motor vehicles (CMVs) in interstate commerce with a gross vehicle weight rating (GVWR) or gross vehicle weight (GVW) of 26,001 pounds or more, whichever is greater, that are equipped with an electronic engine control unit (ECU) capable of governing the maximum speed. The rule states that those CMVs be required to limit their speed (to be determined by the rulemaking) and to maintain that ECU setting for the service life of the vehicle. With this notice of intent, FMCSA requests public comments and data regarding the adjustment or reprogramming of ECUs. The comment period has been extended through July 18. Let your voice be heard. Visit the proposed rule here or visit the Federal Register at: https://www.federalregister.gov/documents/2022/05/04/2022-09443/parts-and-accessories-necessary-for-safe-operations-speed-limiting-devices.