Showing you the extended tail of transportation claims, a jury awarded $5.1 million against Heyl Logistics on a 1998 claim- a transportation broker and the driver Daniel Clarey. There are a number of things that make this case auspicious and several takeaways.
1) Double Brokered- Heyl brokered the load to Washington Trucking who brokered it to Daniel Clarey- who unbelievably lacked insurance and operating authority. Additionally, Clarey was cited with reckless driving and a DUI.
Takeaway- Look for underwriters of truck broker insurance to require contract language in the broker carrier contract that affirms that they do not allow the carrier to double or rebroker a load. Also look for them to decline immediately any risk that does so.
2) Punitive Damages- The court was sending a clear message of no tolerance and as such assigned $1.68 million directly against Heyl. ( The good news for Heyl is that they later settled for less)
Takeaway- Look for more caution when buying surplus lines casualty coverages that exclude punitive damages- it is clear that brokers have the exposure.
3) Coverage Tail- We have seen a Lloyds policy and other policies that only allow a claim to be turned in within 24 months of the date of loss. Coverage would have been precluded.
Takeaway- watch for carriers that have a claims-made feature.
Look for the marketplace to get more cautious....
About Me
- Ben Armistead
- Nashville, Tennessee, United States
- You can reach me at ben@gtu-ins.com. Comments are welcome.
