Presenting a live 90-minute webinar with interactive Q&A Trucking Accident Cases and Insurance Coverage Complexities: Guidance for Personal Injury Counsel Minimum Insurance Requirements, Applicable Coverages, Impact of Written Lease Agreements and More WEDNESDAY, JULY 12, 2017 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Christine Anto, Partner, SmithAmundsen , Chicago Lew R.C. Bricker, Partner, SmithAmundsen , Chicago Peter Kestner , Attorney, McEwen & Kestner , Inver Grove Heights, Minn. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Trucking Accident Cases and Insurance Coverage Complexities: Guidance for Personal Injury Counsel Lew Bricker Christine Anto Pete Kestner SmithAmundsen LLC SmithAmundsen LLC McEwen & Kestner Law Firm Chicago, IL Chicago, IL Inver Grove Heights, MN lbricker@salawus.com canto@salawus.com pkestner@mcewenlaw.com July 12, 2017
Overview • Every large commercial vehicle accident is more than how the accident occurred and an injury. • Issues include: • Entities involved • Contracts • Insurance • Case Study 6
Accident – Case Study • Shipper contacts • Shipper provides Broker to broker load specific directions. of tablets. • Broker enforces • Broker selects Motor directions. Carrier and consults • Carrier places load with Shipper. with 3 rd Party Contract • Shippers gives specific Motor Carrier. directions. • 3 rd Party Carrier has • Shipper leases trailer. Independent Contractor driver. 7
Accident Aftermath – Brain Injury • Coverages in place: • Indemnity and additional insurance • 3 rd Party Motor Carrier has $1M language: • Motor Carrier has $5M • Broker/Shipper SIR and excess • Broker/Carrier • Broker has $1M and • Carrier/3 rd Party Carrier excess • Trailer lessor/Shipper • Shipper has $10M and excess • IC has $750K • Lessor has $3M 8
Minimum Financial Responsibility for Transporting Property (b) GENERAL REQUIREMENT AND MINIMUM AMOUNT. (2) The level of financial responsibility established under paragraph (1) of this subsection shall be at least $750,000 49 U.S. Code § 31139 9
Triggering the Minimums 49 CFR 387 Gross Vehicle Weight Rating >10,000 lbs 10
Exemptions 49 USC 13502 Intrastate commerce ̶ § 13504 Private carriers ̶ § 13505 Miscellaneous ̶ § 13506 Farmers Exempt commodity 11
MCS-90 Endorsement 12
MCS-90 (Exclusions) 13
MCS-90 (No Coverage Limitations) 14
MCS-90 (Reimbursement Provisions) 15
MCS-90 (Direct Action) 16
Intrastate Commerce – TEXAS (43 TAC §218.16(a) Private or for-hire motor carriers with a gross weight, $500,000 All Others registered weight or gross weight rating in excess of 26,000 pounds 17
Form E 18
How to Meet the Minimums ow to Meet the Minimums 19
1. Admitted insurer 20
2. Self-insured program 21
3. Captive Insurer/Risk Retention Groups 22
Coverage Forms erage Forms 23
BACKGROUND • Truckers Coverage Form Introduced in 1970’s • Contemplates for-hire motor carriers operating pursuant to rights granted • by a public authority • Motor Carrier Coverage Form Introduced in 1993 primarily in response to deregulation of transportation • industry Deregulation permitted motor carriers to engage in leasing arrangements; • wherein, the parties could draw hold harmless agreements assigning or accepting liability for injury or damage Motor Carrier Coverage Form was designed to reflect the policyholder’s • responsibilities under such hold harmless agreements June 1, 2010 – ISO Announced it Would Withdraw the Truckers Coverage Form 24
SIGNIFICANT DIFFERENCES BETWEEN POLICY FORMS Who Is An Insured • Permissive users • Owners/lessors of hired autos – owner/operators Priority of Coverage (Other Insurance Condition) • Primary v. Excess Biggest Difference: Dependence on Terms of Written Lease Agreements 25
Motor Carrier Coverage Form Any “auto” 61 67 Specifically described “auto” Hired “autos” only 68 Non- owned “autos” only 71 26
Insuring Agreement SECTION II – LIABILITY COVERAGE A. Coverage We will pay all sums an “insured” legally must pay as damages because of “bodily injury” or “property damage” to which this insurance applies, caused by an “accident” and resulting from the ownership, maintenance or use of a covered “auto.” 27
Who is an Insured? 28
Who is an Insured? 29
Who is an Insured? 30
Who is an Insured? 31
Who is an Insured? 32
OWNERS/LESSORS QUALIFY AS INSUREDS Covers the owner, employee or driver of the leased power unit ONLY IF: 1. The power unit is leased from the owner under a written agreement; 2. The lease does NOT require the owner to hold the Named Insured harmless; and 3. Is being used in the Named Insured’s business of for-hire trucking. 33
OTHER INSURANCE – PRIMARY AND EXCESS LIABILITY PROVISIONS HIRED/BORROWED FROM NAMED INSURED: Primary if written agreement between named insured (lessor) and other motor carrier (lessee) DOES require the Named Insured to hold the lessee harmless Excess if written agreement does NOT require the Named Insured to hold the lessee harmless HIRED/BORROWED TO NAMED INSURED: Primary if written agreement between other motor carrier (lessor) and Named Insured (lessee) does NOT require the lessor to hold the Named Insured harmless Excess if written agreement DOES require the lessor to hold the Named Insured harmless 34
PRACTICAL CONSIDERATIONS OF MOTOR CARRIER FORM • Motor Carrier Policy Will be Excess where Lease Agreements require Owners/Operators to hold Motor Carrier harmless O/O policy to be primary for both in theory • Effect of Anti-Indemnity Statutes • Owner/Operators May Not Be Covered Under Motor Carrier’s Policy • • Does O/O have appropriate primary coverage? • Indemnification obligation • Defense cooperation issues • O/O and its insurer may attempt to push liability onto Motor Carrier • O/O may concede liability — agreed judgment • Could alienate O/O’s— may lose good drivers 35
Some Issues that Arise (MANY more!) Tender Issues Conflicts Communication Priority of Coverage – SIRs, Exhaustion 36
Tender Issues Early Bird Catches… the Cash! Early assessment of loss Issue identification Liability, damages and coverage Driver v. motor carrier Early review of contracts for risk transfer opportunities Insurance, Contractual Indemnity, UIIA, etc. Notify/tender other parties & parties ’ insurers immediately Don’t forget about excess There’s more than defense… Post-Tender Recovery 37
Conflicts Split Conflicts Split Insurance Direction & Sharing Files – with MC & Defense Control of Information Drivers Files Defense with Excess Multiple Claim Reps Defense Counsel Client Insurer • Who do you represent? • Who is kept in the loop? • Whose best interest? • Who do you report to? • Can you tell everyone • Named insured(s) v. Copy? everything? additional insured(s) • Setting up for settlement • Multi-Claimant Issues 38
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