December 29, 2018

Are Courier Insurance Costs Rising?

Transportation

2 min read

Did we see this coming?

A hardening insurance market in the transportation sector continues to impact both insurance companies and YOUR bottom line.

With mega-claims payouts increasing, a growing number of insurance carriers are putting the brakes on writing new policies for newer companies, and some carriers are pulling out of transportation underwriting all together.

Transportation law attorney Henry Seaton, issues this warning to insurance shoppers looking for guidance.

Time to Manage Your Risk?

Truck insurance costs are going up, assuming you can even get coverage. The hardening truck insurance market received national attention last month in a Wall Street Journal article, 'Nulcear Verdicts' have insurers running from trucks. In fact, two major insurers, Zurich and AIG, have dropped coverage for most for-hire trucking companies.

More recently, Progressive, the nation's largest underwriter of motor carriers, told its agents that due to market conditions it is suspending the writing of new policies on carriers that have had USDOT numbers for 12 months or less.

Nuts & Bolts

The Federal Motor Carrier Safety Administration has pulled down Safety Measurement System alerts and relative percentiles under Congressional order, and the systemic flaws and unfairness of SMS are well established. But plaintiff's bar is still using SMS as a tool to increase judgments, and insurers still monitor roadside performance as predictors of plaintiff's demands for policy-limit settlements.

In addition to Progressive's stunning move, there are other signs that the limited markets for small and new carriers is contracting. With the increasing lack of options available to small and new carriers, it is imperative that small carriers (1) rely on knowledgeable insurance agents who can and will shop the available markets on their behalf; and (2) go to the marketplace early before your current policy expires.

The Insurance Road Ahead?

Unfortunately, small carriers don't have many options beyond shopping early and often. Creative insurance solutions such as captive self-insured status and high deductibles or self-insured retentions (SIRs) are not available to new and small carriers. Insurance when sold on a unit-specific basis represents a small carrier's third- or fourth-greatest fixed cost. You cannot wait until the last minute to obtain or renew your insurance, assuming that you can get and afford it.

Henry Seaton is senior partner of the law firm Seaton & Husk, which specializes in transportation law.

Risk Strategies is one of America’s top-20 insurance brokers, with over 50 offices nationwide. In addition to fielding one of the most distinguished teams of personal and family risk management experts in the US, we specialize in the full range of insurance and risk management solutions: property & casualty, alternative risk solutions, employee benefits, executive and key person risk, safety and accident prevention, and financial services.

Contact us today to learn more about using our expertise to take you further and protect your journey. To learn more please call (877) 862-4755.

The contents of this article are for general informational purposes only and Risk Strategies Company makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.