Category : Flatbed Trucking

This is a True Story.  A carrier calls our office to book a load we had shared with our network.  We start our Carrier Qualification Process and find out that the Carrier wants to use an owner-operator.  We advised the Carrier that we needed to see their federal operating authority, Certificate of Insurance, W-9, and a signed copy of our Broker/Carrier Agreement.  When we receive everything back, we find that the Certificate of Insurance shows CARGO LIABILITY INSURANCE ONLY.

So, we called the Carrier back and asked if they had a separate Certificate of Insurance for Auto Liability.  He said, “No. Our owner operator carries Auto Liability Insurance.  All we provide is Cargo Insurance on the load and trailer.”   When we talked to the Owner-Operator, he forwarded to us a Certificate of Insurance showing Auto Liability Insurance.  At this point, most companies don’t check any further.  But our Carrier Qualification clerk, Kellie, called both of the insurance agents to verify insurance coverage.  This is what she found:

The Owner-Operator only had “Non-Loaded” Auto Liability insurance commonly referred to as “bobtail” insurance.  HE WAS NOT INSURED IF HE WAS HAULING A LOAD!!! The company for whom the Owner-Operator was hauling DID NOT HAVE AUTO LIABILITY INSURANCE.  Therefore, if we would have given this Carrier our load, our Shipper and we would have had a huge public liability risk since nobody was insured to protect the public. Imagine what would have happened if this truck was involved in an accident while hauling a load for one of our shippers.  The injured parties would have sued everybody—including our shipper and us—for damages.  The trucker and the company probably are “judgment proof” as all of their operating assets are most likely heavily financed with little or no equity.  That would leave only Freight Tec and its shipper liable.  As a result, we would have had to pay.  Freight Tec carries Professional Errors and Omissions Liability Insurance (the same insurance as medical doctors, lawyers, CPA’s, and engineers carry) in the event we make a mistake.  Fewer than 50 property brokers out of over 15,000 carry this insurance to protect their shippers.  Freight Tec is one of a select group of brokers who does.

BOTTOM LINE: You cannot be too careful in Qualifying Carriers.  Freight Tec does this every day on a FULL-TIME basis to protect our Shippers and ourselves from potentially devastating lawsuits.  To further protect our Shippers, we also carry Professional Errors and Omissions Liability Insurance.