223.6-1

TRUCKERS - INSURANCE FOR NON-TRUCKING
USE ENDORSEMENT — CA 23 09

(January, 2007)

BOBTAILING AND DEADHEADING

A tractor that is traveling on the road without a trailer is considered to be bobtailing.

Example: Joe has dropped his trailer off at ABC trucking and is traveling back home. He is bobtailing.

Example: Joe drops his trailer at Fran's bakery and then heads to Doug's Plumbing supplies to pick up a trailer. In between the two customers, he is bobtailing.

Any time a tractor is pulling an empty trailer, it is considered deadheading.

Example: Mary ran a load of apples from Saginaw to the processor in Grand Rapids but has no pickup in Grand Rapids and returns to Detroit with an empty trailer. She is deadheading between Grand Rapids and Detroit.

If the insured is a trucking operation, these situations should not be a concern since owned tractors and trailers are always covered. Further, hired tractors and trailers are covered during their time of hire.

If the insured is an independent trucker operating for hire with a trucking operation, there is a problem. Once the independent trucker has completed his job, the insurance coverage provided by the trucking operation ceases. The bobtail and deadhead situations are two of the most common times when an independent trucker is operating outside the trucking operation's coverage.

INDEPENDENT TRUCKER'S EXTRA EXPOSURE

An independent trucker may buy a Commercial Truckers' Policy and have coverage all of the time. However, this is expensive and causes a considerable overlap with a client's commercial trucking company's insurance.

Another option would be to buy a Commercial Business Auto Coverage Form policy, listing the vehicles owned by the independent trucker. Then, in order to prevent unnecessary overlap with the trucking operation's policy, the Truckers' Insurance for Non-Trucking Endorsement Form CA 23 09 should be attached.

This endorsement restricts coverage to non-trucking activities. It accomplishes this by modifying the "Who Is An Insured" provision. The form first adds an exclusion stating that covered autos do not have coverage while they are being used to carry property as a business operation nor while they are being used in someone's business that is renting them.

Example: Fergus has a tractor-trailer unit and normally does contract work with ABC trucking. He decides to pick up some extra money by carrying a load for a friend without going through ABC. He makes a mistake and strikes another vehicle. With this endorsement, there is no coverage because he was operating as a business. If he had just helped a friend, there would be coverage and if he had contracted through ABC, ABC's policy would have responded.

Next the endorsement adds a restriction does not recognize anyone who is in the business of transporting property for hire and who is responsible for the named insured's conduct is an insured.

Example: Fergus contracts with ABC Trucking to deliver a load of fruit. The weight shifts and the trailer fishtails. Before he regains control, he strikes two sedans, demolishing both of the vehicles. ABC trucking cannot ask for coverage under Fergus's policy because they are in the business of transporting property for hire and they are also responsible for Fergus' conduct.

Note: Due to the endorsement's schedule, the only vehicles that are restricted are those listed on the form.

UNDERWRITING CONSIDERATIONS

Underwriters are careful with handling independent trucker exposures. Some avoid vehicles that regularly travel to areas where they (the insurers) do not operate. Trucking risks that include regular bobtailing or deadheading in dense traffic areas represent a greater exposure to loss.

Underwriters should be wary of operations that perform jobs that fall outside typical rental or lease arrangements. It is generally favorable when the operator has a good experience record and a long-term lease with a single trucking firm. The underwriting picture is good when the insurer involved also insures the lessee.

Agents and brokers may refer to The Insurance Marketplace, by The Rough Notes Company, Inc., for underwriting assistance when needed and for a list of companies writing this exposure.

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