(September 2013)
INTRODUCTION
In order to understand
this endorsement, a few terms must be defined:
Bobtailing
means driving only with the tractor (motorized portion) of a tractor/trailer
combination vehicle.
Bobtail coverage is auto
liability coverage that insures against losses involving tractors that operate
without a trailer. This usually takes place after a trailer is delivered or
when the operator travels to pick up a trailer.
Dead-heading is driving a
vehicle without freight in the cargo area.
Dead-heading coverage is
auto liability insurance coverage for exposures of operating a tractor/trailer
combination vehicle with an empty trailer.
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Example: Joe drops his trailer off at ABC trucking and drives
back home. He is bobtailing.
Example: Joe drops his trailer at Fran’s bakery and drives to
Doug’s Plumbing supplies to pick up a trailer. He is bobtailing during the
trip between Fran and Doug.
Example: Mary runs a load of apples from Saginaw to the processor
in Grand Rapids but has nothing to pick up there and returns to Detroit with
an empty trailer. Mary is deadheading between Grand Rapids and Detroit.
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These examples are not a
problem for normal trucking operations since owned tractors and trailers are
always covered. In addition, hired tractors and trailers are covered during the
period of hire. However these instances are a problem for independent truckers
operating for hire under a trucking business' operating authority. Once the
independent trucker completes the haul, the insurance coverage provided by the
trucking business ends. Bobtailing and dead-heading are times when independent
truckers operate outside the trucking business' insurance coverage and could be
uninsured.
ADDITIONAL EXPOSURE TO INDEPENDENT TRUCKERS
Independent truckers may
purchase a Motor Carrier Coverage Form and be covered at all times. However,
this is expensive and duplicates or overlaps the trucking business' insurance
coverage when the independent trucker works within the trucking business'
operating authority.
Another option is for
independent truckers to purchase a Business Auto Coverage Form, list all owned
vehicles and attach CA 23 09–Motor
Carriers (10 13 change)–Insurance For Non-Trucking Use. This endorsement
restricts coverage to non-trucking activities by modifying the “Who Is an
Insured” provision. It also adds an exclusion stating that insurance does not
apply to covered autos being used to carry property in any business, or while
used in the business of anyone the independent trucker rents the auto to.
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Example: Fergus normally uses his tractor-trailer unit to do
contract work for ABC trucking. He decides to pick up some extra money by
carrying a load for a friend without going through ABC but makes a mistake
and strikes another vehicle. Fergus has no coverage for the accident because
CA 23 09 is attached and he used the vehicle in a business activity. Had he
been picking up items for a friend without charge, there could have been
coverage.
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This endorsement also
restricts Who Is an Insured to not apply to anyone in the business of
transporting property for hire that is responsible for the independent
trucker’s conduct.
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Example: Fergus contracts with ABC Trucking to deliver a load of
fruit. The weight shifts and the trailer fishtails, striking and demolishing
two sedans. ABC trucking cannot look to Fergus’ insurance coverage because it
is in the business of transporting property for hire and is also responsible
for Fergus’ conduct.
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Note: The only
vehicles restricted are those indicated on the endorsement schedule.
UNDERWRITING CONSIDERATIONS
Insurance companies
evaluate independent trucker exposures carefully because of the complicated
contractual obligations, the expense of the units, and the instability of
bobtail and deadhead situations. Tractors are designed to carry heavy loads and
operate with an unstable center of gravity with horsepower well exceeding what
is needed when uncoupled from a trailer. A tractor pulling an empty trailer may
have a more stable center of gravity but the lighter weight of the trailer adds
instability because of how it responds to wind conditions on the road.
Insurance companies that
specialize in insuring independent truckers normally write this coverage.
PREMIUM DETERMINATION
The premium charged for
acceptable risks is determined based on each insurance company's individual
manual rates or filings, even though Insurance Services Office (ISO) has rating
procedures in the Commercial Auto Rules Section 24. B.
