Looking for contingent liability insurance to supplement your occupational accident coverage? Don’t get 1 quote. Get 3!

The only way to find the best deal is to shop around. We’ll bring you different truck insurance agents, that understand contingent liability needs of motor carriers, to compete for your policy.

It’s fast, free, and most importantly, effective!

What is Contingent Liability Coverage?

Contingent Liability Insurance is coverage that protects a motor carrier should an independent contractor claim to be an employee and sue to be covered under workers compensation. This insurance pays for reimbursements to the motor carrier, should the worker win his case and usually also for court costs the motor carrier incurs.

Motor Carriers & Owner Operators & Work-Related Injuries… Oh my!

A motor carrier can glean many benefits by structuring their business to use leased owner operators, as opposed to hiring company drivers. One benefit is avoiding the hefty costs of workers compensation insurance and covering their independent contractors with less expensive Occupational Accident Insurance instead. Trucking has one of the most expensive WC rates, so this an appealing option!

From the leased owner operator’s perspective, this can be a great arrangement too, since their insurance requirements are also reduced. They are operating under the authority of the Motor Carrier, and the the Motor Carrier provides the costly primary liability insurance. The O/O then usually only needs to cover physical damage on their truck and getting a Bobtail/NTL policy to provide coverage when they are not under dispatch from their Motor Carrier.

But what happens when there is trouble in paradise?

A unique risk that motor carriers sometimes face is that an independent contractor will get into an accident and then claim to be an employee of the company in an attempt to collect Workers’ Compensation Benefits.

Why would they do that? Even though the Occupational Accident benefits kick in, it might not cover all their medical expenses. At that point, the independent contractor may make the claim that they are an employee and then turn to the Motor Carrier for Workers’ Compensation benefits.

Enter Contingent Liability Coverage.

This is really the best, and only, solution to protect the Motor Carrier in this scenario.

It’s important to state that Motor Carrier Contingent Liability Insurance is not a substitute for Workers Compensation. Most Insurance Carriers will require you to use their Occupational Accident Insurance policy and make sure your lease agreement with your owner operators is legally up to standards. They last thing an insurance company wants to do is payout one of these claims. Nonetheless, it’s an important coverage to have if you have leased-on truckers.

What Is an Independent Contractor, Really?

As a motor carrier that hires owner operators under a lease agreement, your relationship with your drivers seems clear-cut. They’re independent contractors—you know it; they know it.

• Uses his own truck, tools, and equipment
• Hires and pays assistants
• Sets his own work schedule
• Makes profits or suffer losses

If even one of these criteria is not met, the independent driver can build a case that they are an employee and then might be deemed one by a judge. Without contingent liability coverage you could be on the hook for damages and an expensive lawsuit.

These situations are common. Just Ask FedEx.

In August 2014, the U.S. Ninth Circuit Court of Appeals ruled that 2,300 drivers FedEx had deemed independent contractors were, in fact, employees of FedEx and entitled to Workers’ Compensation benefits.

This ruling favored the drivers despite the fact that they all owned their own vehicles and were in business for themselves. But they won the case and ended up costing FedEx hundreds of millions of dollars.

If it can happen to FedEx, the 3rd largest shipping company in the world, it can happen to you. Luckily, you can be insured against this sort of thing with Contingent Liability Insurance.

To find the best deal on Contingent Liability insurance, we can bring you up to 3 agents to compete for your business. Getting proper coverage at the best price is what we can help with. By getting multiple quotes, you can compare and find the best policy for you!