This month I wanted to make you aware of some recent changes in the insurance industry’s standardized policy language that have the potential to significantly impact your coverage, business and assets.
In our industry the Insurance Services Offices, Inc. (ISO) provides what is referred to as “standardized insurance policy language.” The standard language this company supports becomes the “bones” of an insurance policy. Insurance companies use the ISO form and then add to it their own mix of custom endorsements or ISO available endorsements to create a unique policy that differentiates them from their competition.
Historically there have been two insurance forms offered through ISO with respect to primary auto liability for the trucking industry: Truckers’ Coverage and Motor Carrier Coverage. Recently, ISO announced that it will no longer support the Truckers’ Coverage form. This has resulted in many trucking insurance companies changing the form they use from Truckers’ to Motor Carrier.
It is important that you are aware of this change, as changing from one form to the other includes significant changes in policy language that can potentially impact your coverage. Most importantly is that the Motor Carrier Coverage form does not look at operating authority to determine who is an insured under the policy and the priority of coverage. Instead, it looks to the lease agreement between the parties. As a result, if you are an owner operator, you must be certain to have a written lease agreement with the motor carrier under whose authority you are operating and also make certain that the lease agreement does not require you hold the motor carrier harmless. If the lease agreement requires you hold the motor carrier harmless, or if there is no written lease agreement in place, then you (the owner operator) will be primary for any loss. A non-trucking use policy will NOT provide the coverage you will need to cover this sort of a claim – only a primary auto policy will cover this sort of exposure.
Do you have questions on how the change from Truckers’ form to Motor Carrier form might impact your business or wish to make certain your lease agreements will not impact coverage in a negative way? Call our office today at (800) 596-TRUCK (8782). At the Navigator Truck Insurance Agency we work hard at being accessible, helpful and result oriented.
Until next month,
Jeffery A. Moss, ARM
President