AGENCY CORNER - Non-Trucking Liability

By Greg Hutson – FMIC Agency

Non-Trucking Liability has been around for a long time. It is used to cover a trucker while leased to a trucking company for the trucker’s personal use of their truck. Under dispatch, they are covered under the primary liability of the company they are leased to. Fueling, taking the truck for repairs, and washing the truck are just a few things that can be considered business use and fall under the coverage of the company the truck driver is leased to. There is a difference between Bobtail and Non-Trucking coverage, but neither is something we would normally see in forestry or logging.

WHY DO WE NOT SEE IT?

We do occasionally see where a company will add a truck to their policy that they don’t own. Basically, to help a contract hauler. Not a good policy to do and a discussion for another day. All policies written on a Non-Trucking basis have stamped on the declarations page “No Lease, No Coverage” So why should we be concerned?

Most agents will indicate Non-Trucking Liability coverage on the certificate of insurance. If you use this person to contract to haul for you without a lease, he has no coverage. If an accident occurs depending on coverage symbols on your policy, you become primary for any damages. I have seen some agents omit to designate this on a certificate.

Making sure you are an additional insured will help. Companies that write Non-Trucking will not add an AI unless it is a Loss Payee requesting it. Always request a certificate before you hire a contract hauler and make sure you are an additional insured. If you see the words Non-Trucking on the certificate, this is not someone you would want hauling for you.

LET’S LOOK AT A SCENARIO.

contract between you and your subcontract haulers. This is one way to prove they are not your employee. You should have a certificate from your subcontract haulers naming you as additional insured and having the same coverages the mill requires from you. You may still be pulled into a loss caused by your subcontract hauler, but you have in place the necessary precautions to protect you as much as possible.

NEXT SCENARIO.

You don’t have a contract with your subcontract hauler. You do not have an updated certificate naming you as an AI. The subcontract hauler has a Non-Trucking liability policy or maybe no coverage at all. Depending on the coverages you have if pulled into a loss caused by the subcontract hauler you may not be properly covered. The loss is denied from the subcontract hauler's coverage if available or due to Non-Trucking Liability.

The loss is directed at you and the mill at that time. You may have coverage and if you do you become primary. You did not make sure the subcontract hauler had proper coverage which is your duty. Because of that, the mill will also bring a Breach of Contract suit against you for not conforming to the contract between you and the mill ensuring proper insurance requirements were met.

All of this is avoidable and FMIC Agency can help you with any questions you may have on a certificate or coverage issues so never hesitate to call your agent.

Greg Hutson, FMIC Agency