GENERAL LIABILITY – A “MUST HAVE” COVERAGE
If I asked most truckers what the biggest chance is you take every day, they’d probably answer “just driving my truck down the road.” That’s reasonable when you consider that a fully loaded class 8 tractor-trailer tops the scale at 80,000 pounds. Traveling at 65 miles per hour, if you hit a typical private passenger car weighing only 5,000 pounds, the car will most likely be a total loss. The driver and passengers will be seriously injured or killed. This is the worst case and every trucker understands their need to carry at least $1,000,000 in auto liability insurance. But what about the chances you take when you are outside of your truck? Maybe you think “I spend 90% of my time in my truck. What little risk I have the other 10% isn’t worth talking about.” To be fair, you may be right…most of the time. However, the shippers you haul for aren’t that optimistic, which is why they require another $1,000,000 in general liability insurance. A few examples of possible general liability claims should be enough to illustrate why this is “must have” coverage.
Tom, an owner-operator with 17 years of experience, is in line to be loaded at XYZ Timber Products. The line is longer than normal since it’s springtime and the home building season is gearing up. Business is good, but at the moment Tom needs to find a restroom. XYZ has a strict stay-in-your-truck-at-all-times policy, but nature is really calling so Tom asks the first XYZ employee he sees for permission to use the men’s room in the office next to where he is parked. The employee replies “yeah, sure.” As Tom walks the few yards to the office, another XYZ employee, backing a loaded forklift away from the truck in front of Tom’s, sees him too late and swerves to miss him. This sudden change in direction causes the logs on the forklift to roll off and crash into the office. No one is hurt, but the office building sustains $62,000 in property damage. During the claims investigation, it is revealed that no employee had authority to give Tom permission to leave his truck, and there are no witnesses who can back up Tom’s story. The Access Agreement Tom signed with XYZ confirms that he agreed to remain in his truck during loading and unloading. Because Tom’s presence on foot outside his truck was the proximate cause of the accident, the general liability policy applies.
Lisa is the owner and CEO of ABC Trucking, Inc., a 47-power unit dumping fleet she inherited from her dad who inherited it from his father, a WWII veteran who started with three US Army surplus dump trucks in 1946. Lisa is both proud and very protective of ABC and hopes to pass it on to her son someday. ABC is so well established in its community that Lisa rarely needs to advertise for new drivers. In fact, most new hires are referred by existing or past employees. One such referral was a driver we’ll call Fred. Being referred by one of ABC’s longest serving drivers, no background check was done on Fred who had an undisclosed prior conviction for sexual harassment. A few months after hiring, Lisa receives suit papers from People’s Coal Company, one of ABC’s best customers. The suit alleges that Tom came into People’s main office to purchase bottled water from a vending machine that had long been made available to the public. While in the office, Fred allegedly made comments of an explicit sexual nature to People’s office manager. The demand is for $1,000,000 in damages for ABC’s “negligent hiring” of Fred. Since the suit has nothing to do with the ownership, maintenance or use of the truck Fred was driving, the general liability policy applies.
The odds of claims like this happening are comparatively small, but the range of possible claim scenarios is large. Not having general liability insurance can jeopardize your business’s future.*
(* The hypothetical claims discussed in this article are not intended as a full description of what general liability insurance does or does not cover. For complete information on this subject please read your general liability policy carefully or contact a licensed insurance agent.)
