Why We (And You) Should Use SaferWatch for Carrier Selection

Automation is becoming more important to transportation insurance- especially to the logistics/truck broker side of the equation. There are vast amounts of data available to both friends and foes of truck brokerage operations. The biggest growth area is in carrier selection data.

As the data is easily obtainable from both public and private sources, failure of an insured to obtain information on their carriers can and will be used against them in a courtroom. So even the smallest truck broker is using carrier selection software to qualify carriers that not only protect their insurance company and balance sheet, but also to augment commerce by providing their shipper customers the best carriers they can find.

From an insurance agent's perspective, it is important to know that there is not only the opportunity to sell best-in-class insurance coverage, but also provide risk management turnkey within the insurance sale. We see no other such value added being offered in the logistic insurance sector.

There are several good vendors in the carrier selection data and software business. There is only one great one from our perspective, SaferWatch. www.saferwatch.com

While GTU has no financial interest in SaferWatch, we have partnered with them for many years. The partnership has been so good that our carrier insurance partners for whom we have the underwriting pen also believe in their inherent value.  Likewise, as GTU is the only underwriter nationally to have a trucking insurance division alongside a truck brokerage insurance division, SaferWatch wanted to learn how a trucking underwriter views and grades carriers. The upshot of our collective work is that we created a carrier risk management algorithm which grades every single carrier in the FMCSA database like a trucking underwriter would. Go to http://www.saferwatch.com/main/gtu-saferwatch-snapshot/ .

Note the carrier selection algorithm is based on carrier risk selection underwriting that has been both tested and proven for over 30 years. As part of our service, we actually upload from Excel the carrier name and MC(motor carrier #) and provide the report free of charge.

The idea is not to advise a truck brokerage or their agent who their carrier heroes or zeroes are. Rather, it is to provide data that integrates with their TMS ( transportation management software) . So with their TMS, they can know which carriers, shippers and freight lanes are most profitable to them. By integrating SaferWatch, they can dovetail carriers that have the risk management data with profitability- thereby creating a scientific, best practices solution to something today that is used subjectively and with happenstance.

What makes this more compelling is that if GTU writes the contingent auto liability or the truck brokerage liability, our carrier insurance partners will provide free annual service with SaferWatch  by discounting the premium for the cost of the basic annual service. So at binding they simply get a username and password and they are able to add and delete carriers at will. The value of the service is that anytime the information changes, whether it be safety rating, CSA-e percentile score or insurance carrier, that data will be automatically updated and the insured will be notified of the changes. Pretty cool indeed.

So how does SaferWatch compare to other carrier selection software services? We looked at two competitors and this is what we found out:

1. Carrier 411
   

From a very general perspective, Carrier411 is similar to SaferWatch Guardian, except it is more expensive and less robust. 

• SaferWatch technology for updating carrier data is superior to Carrier411.
• SaferWatch calculates and provides CSA-e percentile scores, the comparable to CSA scores still used by SMS.  Carrier411 does not.
• SaferWatch Guardian offers users the ability to create custom carrier selection guidelines, as well as multiple shipper specific checklists.  Carrier411 does not.
• At the next level, SaferWatch Assure includes Certificate of Insurance requesting and monitoring.  Carrier411 does not. 
• Carrier411 has FreightGuard Reports for marketplace fraud reporting.  These reports are very popular with their users.  SaferWatch counters with TIA Watchdog Reports, however, this feature is only available to TIA members.  

    

     2. RMIS (Registry Monitoring Insurance Services)

From the perspective of a third party certificate of insurance company, RMIS is similar to SaferWatch Assure.  That said, as a robust carrier risk management solution (with certificates of insurance), RMIS falls far short of SaferWatch Assure, and it too, is far more expensive.

• SaferWatch data, and technology for updating carrier data is far superior to RMIS. 
• SaferWatch calculates and provides CSA-e percentile scores, the comparable to CSA scores still used by SMS.  RMIS does not.
• SaferWatch provides users the ability to create custom carrier selection guidelines, as well as multiple shipper specific checklists.  RMIS does not.
• SaferWatch provides carrier search tools for capacity development on a scale that no other product can compete with. 
• SaferWatch Assure provides immediate 'load waiting' Certificate of Insurance requesting with a Service Level Guarantee.  RMIS does not.  
• SaferWatch Assure offers unlimited requesting and monitoring.  RMIS prices based on the number of carriers monitored. 
• SaferWatch Assure is priced hundreds of dollars (sometimes $1000's) less per month than RMIS

Note SaferWatch integrates with virtually all TMS ( transportation management software). It is not a requirement that the insured change vendors. We are just trying to offer a value added and since the service is less expensive , it’s a why not from our perspective.

So in closing, SaferWatch is the perfect risk management solution for truck brokers. The data is more robust and it is cheaper. It's like the insured getting better coverage at a cheaper price. Truly the value added proposition.

Contingent Cargo Case Law- The Problem and The Solution

Recently I read an excellent case law summary by Robert Green with Smith Moore Leatherwood, which has a highly reputable transportation legal practice.  See the attached link:

http://www.smithmoorelaw.com/Court-Affirms-Contingent-Cargo-Policy-Limiting-Coverage-to-the-Amount-Available-Under-Primary-Policy

The upshot of the case, which is a frequent claims issue and problem, is that Travelers did not cover the loss the way the insured, a truck broker, had expected. In fairness to Travelers, contingent cargo coverage assumes that there are primary limits that are equal to the value of the load. In this case, the truck broker insured was probably provided with a certificate of insurance that said nothing about there being a sub-limit for the copper commodity. As such the insured was left with a difference-in-limit claim or insufficient limits claim.

Clearly Travelers failure here is an industry failure- and if the insured truck broker obtained a certificate of insurance from an A -rated carrier, they would feel they have done their job to honor the terms and conditions for triggering a contingent cargo claim.

Note the failure of of the MTC insurer and the carrier to pay the claim are coverage triggers for a contingent cargo claim. So there must have been a communication problem with this claim as it does not appear that the insured ( and we assume their agent) was aware that an MTC insurance policy having a sub-limit was not going to trigger excess coverage in Travelers form.

So there are a couple of solutions that we offer that involve risk management and best practices perspective:

• Risk Management in the broker carrier agreement- The insured should have in their insurance section of their broker carrier agreement that insurance coverage should have no sub-limit for any commodity being hauled. While this is certainly not fail-safe, it does provide evidence that the insured did not sanction the carrier not having enough limits- which would certainly help in a subrogation case.
• Best Practices Operations when Handling Target commodities- Clearly when copper is being hauled, or any target commodity is being hauled, it is more important for the insured truck broker to go beyond just getting a certificate of insurance and ascertain coverage forms, whether there are sub-limit issues ( or unattended vehicle exclusions), and obtaining MTC carriers reputation for paying claims and losses.

Also, there are coverage solutions. With GTU we can provide in 5 different insurers difference in limits coverage for claims such as these. So clearly the coverage form discussed in this claim with Travelers is deficient for the insureds needs.  That being said, most coverage forms require the insured to verify the coverage limit is equal to the value of the load. However, if they had a sub-limit situation like this, our coverage would provide coverage for the difference in the limit up to the limit of the policy. That is what the insured wants and needs and its a shame to see Travelers not covering this kind of loss ( we see others as well).

The main coverages that are sought by truck brokers on contingent policies are:

• Difference in conditions/ coverage excluded
• Difference in limits
• MTC insurer insolvent
• MTC policy cancelled/ coverage not applicable

We are able to offer coverage even for lack of response with one of our partner insurers. Also we offer a new Bridge coverage form to build limits beyond $100,000 MTC limits  (which approximately 90% of carriers have) up to $250,000. We offer shippers/ interest and cargo insurance as well up $1,000,000.

We hope to see the industry do a better job covering contingent cargo claims in the future. And the agent and the buyer should read their policy forms and ask questions!