Confusion continues regarding how and when an Owner Operator’s policy “triggers” and pays when the Owner Op provides his own Primary Commercial Auto Liability and Cargo as utilized in the “Multi” insurance model.
Recent unpaid claims in our Expediting Community highlighted what happens when an Owner Operator provides the wrong type of coverage to the Motor Carrier.
….Here’s the problem, for the Multi coverage to “trigger” and “pay first” for an Expedite Owner Operator, his policy must have endorsements added to it.
“Unlimited” radius is the least of it…if an Owner Ops’ policy does not include endorsements of “Non-Contributory” for Liability and “Care, Custody and Control” for Cargo, insurance companies are within their contractual rights to deny coverage per THEIR CONTRACT with the Owner Operator. The claim then falls back to the Motor Carrier, and this is what has occurred in the uncovered claims that are swirling around right now.
You see, when an Owner Operator hauls for the benefit of a Motor Carrier across state lines, or hauls cargo where his name is never on the Bill of Lading everything becomes about CONTRACTS.
The stricter insurance requirements everyone is seeing is because of the unpaid claims where 3PLs and Brokers were left holding the bag when the Motor Carrier thought they understood how it all works…and didn’t.