Overdrive Magazine | Trucking Business News & Owner Operator Info
Issue link: https://read.dmtmag.com/i/687054
June 2016 | Overdrive | 25 choices about where to spend your money to ward off risk could be key to your sur- vival if you collide with a four-wheeler. Excess liability insurance The threat of litigation is ever-present in the event of an injury or fatality accident, says Bill Strimbu, president of Nick Strimbu Inc., a third-genera- tion 130-truck flatbed, refrigerated and specialized carrier. And that even goes for accidents where you might not expect litigation to rear its head. Strimbu says one of his trucks left the roadway and flipped in a ditch three years ago. "The woman who later said she was following the truck claimed she was so scared, she hit her brakes" and came to a quick halt, injuring her neck. She brought her chiropractor along to negotiations, Strimbu says, though "I didn't want to settle out of court where we weren't at fault." That's a common complaint of carriers threatened with litigation and advised by insurers and their representing attorneys to seek a settlement. Strimbu fought the allegation, and the lawsuit was withdrawn. "But the statute of limitations is not up yet," Strimbu says. "She can refile if she can find an- other blood-sucking trial lawyer to take the case." The company carries an extra $1 million in excess liability insurance over a standard $1 million policy, but with a high deductible of $100,000 to reduce the premium's expense. That means he's responsible for any insurance settlement in a given year that's under $100,000. It's notable that in the few cases he's been to court over during the last 10 years, they ended up costing $2 million and $2.5 million, right at and above the limits of his liability insurance. "They would have been more had we had more insurance coverage," Strimbu says. Therein lies the paradox around what's been the traditional line of pro- tection against civil liability litigation – liability insurance. It seems wise to have as much protection as you can afford. Yet the more you have, as the example of Strimbu's court cases suggests, the more likely it is that an abnormally high post-jury award will ultimately result in a settlement near or equal to the limits of whatever you carry, increasing costs for you and your insurer. Given these dynamics and the mini- mum $750,000 in government-mandated required liability coverage, it's no wonder trucking businesses become a target for plaintiff's attorneys. "There's a lot of states where claim- ants get attorneys, and even if the claim- ant is at fault, if they can demonstrate comparative negligence" – shared fault by both parties – and "show that a trucker was at least 50 percent at fault, their claimant might not have to pay any- thing," says Steven Libertore of insur- ance agent National Risk Management Services. "It doesn't hurt that [claimants] get letters from attorneys saying, 'You don't owe us a dime unless we get money for you.' " Libertore says that for the smallest fleets with which he specializes – one to nine trucks – insurance policies typically have no deductible. The small fleet pays no part of any claim directly. Having liability insurance is only the first step in being prepared for a worst-case scenario of a collision with a four-wheeler. I don't know 4% Following a tow-away crash 6% Following an injury crash 7% Following a fatality crash 3% Following more than one of the above 4% No, but plaintiffs sued the company I drive for/lease to 4% No, but threat of litigation led to a settlement 3% Have you been a defendant in a post-crash civil lawsuit? 20% No 69% In spring polling, one in every five of Overdrive's mostly owner-operator readers reported being named direct- ly as a defendant in a civil trial following a crash. Max Heine • Buy as much liability insurance coverage as you can afford and still maintain a healthy profit margin. • Get a forward-facing dashcam to record accidents. • Begin using electronic logs to encourage and document 100 percent hours of service compliance. • Devise a system for routine saving and purging of data from your ECM and other equipment, such as a dashcam. • Get proper treatment for any medical condi - tions, especially sleep apnea, to remove any hint of impairment. PROTECT YOURSELF