An insurance provider has declined coverage for a claim by a 'Day-Trader' Owner Operator.
Reportedly the Owner Op called the insurance provider “Direct” one night to reduce coverage “he didn’t need” in order to save some money on his premium. He insists he called “Direct” again a few days later to put the coverage back on “for when he did need it.”
Well an accident has occurred, and “Direct” says there is no record of the second call to add the coverage back on the policy.
Bottom line, there is a sizable loss that the Motor Carrier will be liable to pay because they’re who promised that the unit and cargo were insured. The Broker and Shipper are fighting with the Motor Carrier who’s fighting with the Owner Op…all because an Owner Operator did not think he needed coverage for a few days.
There is some Auto Liability in place, but the Owner Op removed the Motor Carrier as Additional Insured which eliminates their first dollar rights to the policy. All Cargo insurance coverage was removed as well, and the cargo itself is currently in storage pending investigation of custody.
Had Agent “monitoring and verification of coverage” been in place, the Motor Carrier would have received a real time alert with “notice of coverage change” that the Owner Operator’s Liability was reduced, cargo coverage was removed, and the Motor Carrier was no longer listed as Additional Insured.