It is widely known that the bill of lading (BOL) is the legal instrument of carriage from both a property and casualty insurance perspective. The BOL, in essence, determines the legal liability.
One of the challenges for a truck broker, and their casualty insurer, in avoiding that legal liability, is for the broker to NOT have their name on the bill of lading as the “carrier”.
Having the bill of lading in the broker's name negates any presupposition( as far as defense counsel is concerned) that the insured is an independent contractor in the due course of transit. The Federal Department of Transportation rule decrees that the carrier’s name ( and that does not mean the broker) Shall Be on the bill of lading in the space "Carrier". Therefore, it is actually illicit to have the broker’s name in the carrier space. Also, insurance companies view it as very difficult to succeed in defending a claim against an effective claims counsel and jury.
We are aware that there is a transition in the marketplace away from the bill of lading. Many of our broker insureds recognize that it's-a-work-in-progress away from shippers putting the BOL in their own name- but they have not dismissed the issue and simply operate in a that-is-the-way-it-is mentality. The Transportation Intermediaries Association and other organizations also concur with the insurance company’s stance that the BOL is the primary instrument determining legal liability- and therefore do not sanction truck brokers allowing the practice of having their name in the carrier space.
The solution is to require the shipper to utilize the carrier name in all cases. While that may not be able to be done by an insured in one day, it doesn’t mean that a truck broker should continue to allow the practice in perpetuity.
