Contingent Cargo Coverage Form Comparison- Hanover versus Essex

Both Hanover and Essex are leading carriers in the contingent cargo space . Hanover is known as the industry leader with the premier policy forms but they will not write every account. That being said, Essex has more limited coverage but will write the tough stuff. We like both carriers and feel they both have a place in the market.

So what are the main differences ( there can obviously be modifications and improvements):

First and foremost, Hanover is a legal liability form subject to terms, conditions and exclusions- so in essense they pay unless it is excluded. Conversely, Essex is a specified perils form. It pays only if the loss meets the definition of specified perils. Since most folks are looking for excess coverage or difference in conditions coverage (DIC), a specifed perils form is not construed to be comprehensive. Hanover offers a comprehensive form.

Other issues:

The exclusions seem to mirrror each other: Civil Authority, Nuclear Hazard, War and Military action, Pollutants, Loss of use, Criminal or Dishonest Acts, Spoilage and Terminal to name most of them. Essex also excludes Wetness and Loading and Unloading

The property covered is a bit more restictive in Essex which excludes eggs, items left for more than 72 hours. Essex usually includes a special theft endorsement that has a sublimit of $5000 for target commodities

Defense costs are covered by Hanover; it appears that Essex is silent with respect to this issue

Essex also has a 100% co-insurance clause on their coverage form.

Obviously coverage is determined by the actual policy being issued, but as you can see, Hanover and Essex are apples and oranges relative to contingent cargo coverage.

For further information, please contact your underwriter.

Dragonfly/Sperl Decision now Final- The Legal Precedent Game Changer for Truck Brokers and Freight Intermediaries

And you thought the whole need for contingent auto and more importantly truck broker liability was bogus....

First there was Schramm; then there was Sperl. Both cases tapped C. H. Robinson for significant amounts.

The case mentioned that follows is known as the Dragonfly/ Sperl Decision and appeared in Transport Topics.

"The Illinois Supreme Court has denied an appeal request from C.H. Robinson Worldwide over a $23.8 million civil verdict against it, following a fatal traffic accident involving a carrier hired by the broker.

A spokesman for C.H. Robinson, North America’s largest freight broker, said last week the company would not

pursue additional appeals at the federal level.

The Illinois high court actually reached its decision in late September without explanation or comment as to why

the justices had decided to deny the company’s request, but news of the ruling is only now circulating through

freight industry circles.

The decision leaves in place an Illinois Appellate Court ruling from March that upheld the 2009 decision of a trial

court that found Robinson among those liable for a 2004 traffic accident in Will County, Ill., with two fatalities.

“We are obviously disappointed that the Illinois Supreme Court declined our petition for further review, as we

strongly believe that the Illinois Court of Appeals failed to follow well-established Illinois law regarding a party’s

responsibility for the negligence of an independent contractor with which it contracts,” said Ben Campbell, Robinson’s general counsel.

The appeals court “also improperly attempted to distinguish this case from multiple prior state and federal court

decisions in which precisely the same claim has been asserted against C.H. Robinson and summarily dismissed as a matter of law,” he added.

The case arose from an accident on Interstate 55 southwest of Chicago. Owner-operator DeAn Henry, leased to

motor carrier Toad L. Dragonfly Express, was hauling a load of potatoes owned by Robinson that was heading for

a warehouse operated by the broker. The truck was involved in a collision, killing two and injuring others.

An attorney representing the widow of one of the deceased said Robinson was held properly responsible.

“People who want to call themselves brokers can’t pull the strings behind the curtain and then say they’re not in

control,” said Timothy Cantlin, whose law firm represented the widow of one of those killed.

“When you look at the factors, Robinson was much more than just a broker. They were the dispatcher and

controlled everything until the accident occurred,” said Cantlin, adding that his client’s share of the verdict was

$8.5 million.

The three main parties named as defendants after the accident were owner-operator DeAn Henry, Dragonfly

Express — which since has closed — and Robinson, which had the deepest pockets of the three."

The key and operative word in this whole proceeding was "CONTROL" which negated the defense based upon the independent contactor status established in contract.

If your insureds are not buying truck broker liability to protect themselves and their shippers, that would seem to be very poor judgement indeed. We are seeing many brokers unwilling to change their business operations to confront the necessary best practices that mitigate risk.