Insurance Gaps That Could Cost You - w/ Rob Hassman | Ep 57

Justin: 00:00:00

Welcome back to Logistics and Leadership. Today we're going to geek out, get a little high level and strategic on the best practices when it comes to transportation law.

Rob, we've had you on a few times now. There's a lot of hot topics, specifically with claims, insurance companies, contracts, you name it.

One particular thing that you brought up in a somewhat fresh case that we just got resolved was scheduled auto with insurance policies. We were in a situation where we had a larger asset based carrier lease on and it was a legitimate lease lease on an owner operator.

But what happened was the policy did not actually cover that leased carrier or that lease driver. How could we have prevented or what measures could we have taken, if any, to identify that and potentially avoid the issue that we did run into?

Rob: 00:01:03

So I'll give you what I would call best practices and what I'm told frequently by my clients is there's no way I can ever do that. Which I say that's ridiculous because generally brokers, when I say brokers, employees broker loads, right?

And unless it's just two people, three people, five people in an office, an office like yours has employees that broker loads, but you also have back office people who do carrier setup, carrier monitoring, that sort of thing. Also there's websites and whatnot you can use for carrier monitoring.

And I say that because when you set up a carrier and have them sign your broker carrier agreement, okay, obviously one of the first things you do before you move a load is get their insurance certificate. Well, what I tell my clients is when you get that cert, you need to call the agency who gives it to you.

So like, you know, an insurance company could be great American, but the insurance agent might be Hub International. Call the insurance agency and just double check is a, is this a scheduled auto or scheduled driver policy?

If they say no, then that means every driver, every truck that runs under that MC number is covered. And this is a non issue. If they say yes, it's a scheduled auto and scheduled driver policy, then you need to say please provide the schedule.

And sometimes they will already have provided that.

Justin: 00:02:24

To clarify, if you get a COI from a carrier, an asset based carrier, that is not something that would be reflected.

Rob: 00:02:31

Sometimes it is okay, Sometimes the insurance agency already provides it.

You know, at the bottom or on page two you'll see remarks that section, sometimes you'll see various VIN numbers and driver names and if it is a scheduled auto or scheduled driver policy, if the VIN number of the truck that is pulling the tractor or the trailer is not covered, or if the driver in that truck is not covered, then you have no insurance. Okay? So the first thing you want to do is call that insurance agency and verify is this a scheduled auto policy or not?

If yes, please provide me with the schedule that lists all VINs covered and all drivers covered. Okay? If they say no, then you're good. You don't have to worry about which driver there is and which isn't.

Because frankly, the biggest three reasons I get denials and claims are temperature, which insurance will and I say, I mean denial from insurance.

Insurance will say you don't have a reefer breakdown, two scheduled auto or scheduled driver, and three, non cooperation, which will never be able to help. Right? But temperature, just like scheduled auto. I'll tell you what I think you should do on that.

But just like schedule auto, what I'm going to say is what I think you should do again. So call the insurance agency, find out if it's a scheduled policy and. And if so, get the schedule to determine who's covered.

And I would recommend that your carrier, monitoring company or personnel do that monthly. If you can't do it monthly, quarterly. If you can't do it quarterly, biannually.

If you can't do it biannually, annually audit, call the insurance agent, get the schedule. Because for instance, like the claim we had, maybe that guy was leased on a week after you first set up with this carrier.

So we need to know in real time who's getting added and taken off the policy. So as often as you can update the schedule, you're going to know what trucks are covered and which drivers are covered. Okay.

And so if you have a scheduled autopilot. So that's something that I think can be done.

Some of my clients tell me it can't, but I think it could be because that is not something that needs to be done like an employee on the ground floor. Boots on the ground. This truck's. I have this company that needs to ship something. I need to put a driver on it right now. Right?

And they say I don't have time to do that stuff. Well, you have people under work underneath you that could cover loads, but it may, if you don't have time, I don't know.

I don't work in your industry brokering loads. But monitoring the insurance policy can be done in real time, in my opinion by someone who doesn't broker loads.

So when you have the schedule and the insurance cert, if you book. Let's go back to our Big Wave situation. If you book Big Wave to move a load when they get there.

What I would love to see my clients do is so Vin 1, 2, 3, 4, 5, 6, 7 and John Doe are covered by this policy. Dispatcher, can you read me the VIN on that truck and the MC on the side of that truck and what's the driver's name? Okay, good. They're covered.

Off you go. That way you know that the VIN of the trailer, the driver there and are covered. And by the way, that truck is John Doe. So therefore it's verified.

Some people say, well, the dispatcher is never going to do that. Someone on the loaning dock's never going to do that. Okay, if that's the case, you tried, but maybe some will.

And if you catch 10%, 20%, 50%, it's better than no. Percent. So that's something I think that can help with scheduled auto.

Other than that, I don't really know what you can do because you're never going to know who's present, who's not. So dovetailing from that. The other thing that happens to me frequently is 34 continuous is the temperature, right?

Well, it gets there and we find out by the reefer download that it was on start, stop or it was on cycle, same thing as that one. How difficult would it be to call the dispatcher or the loading dock and say, say, hey, this needs to be 34 continuous.

Go to the reefer and make sure it's on continuous and at 34 rather than start, stop or cycle Picture good in my file. I know it's good. Maybe it changes. Maybe it runs out of gas, maybe the driver turns it off, I don't know.

But at least, you know, at dispatch it was set right. I think that's going to help some claims.

Justin: 00:07:02

And if you have that verification with driver or, you know, let's say you're using text verification, pictures, you name it. Would that hold up against an insurance company with temp issue?

Rob: 00:07:16

Well, it depends. I mean sometimes later on they change it on the temp issue. If it's that continuous the whole time and the download shows that. Sure.

But sometimes they fail to fill up the reefer with gas. It runs out of gas, it goes off. Sometimes they want to save gas. So after they leave because the dispatcher put it on continuous, they turn it off.

Drivers do weird things. Truckers do weird things. Sometimes we even have, we know a driver is covered or his truck is covered.

Halfway through he gets out, another driver gets in. Weird things happen. In our industry, things are going to happen, but these are just ways to try to Minimize things from happening as best you can.

Justin: 00:07:56

I think that's extremely helpful. And it's. Yes, it is. Adds additional work, it adds more steps.

But if, if those steps eliminate a lot more steps when it comes to the claim or, you know, the headaches, financial loss that you're dealing with, I, I think it's worth it. The question is whether or not you can retroactively set up those types of verifications with, with partners like highway or care411.

I know it's not as integrated, but.

Rob: 00:08:23

I think this is something you're going to have to do and people are going to have to do in house.

Justin: 00:08:26

Well, there's a lot of partners out there now that, that have the ELDs connected with the VIN numbers and it's all housed in a platform. You know, highway, there's a lot of other providers out there.

Rob: 00:08:36

Yeah, I mean, if you could make that happen, that would be ideal.

Justin: 00:08:39

Yep. So.

Rob: 00:08:39

And you know, to your point on, people always say if that takes a lot of time, it's going to lose me money or whatnot. Okay, let's say this takes you an extra five hours a week and in those five hours you could have brokered ten loads at $500 profit a load.

Okay, five grand times all year, 200 grand. You get three $80,000 claims because you didn't do this, which you might get seven. You're in the same spot.

It's better to budget for what you can control, which is money in the door, than what you can't control or factor for, which is. I have no idea when a claim's going to happen.

Justin: 00:09:15

Well, a lot of times the people that are telling you that's not realistic are the ones that aren't dealing with claims or it's not hitting their right, their bank account. So I'm with you.

s and some big initiatives in: 2025

We'll include your contact information in the episode notes if anyone wants to reach out to you directly.

Definitely shoot over your questions, comments, anything that you have or connect with Rob directly would love to engage with you and answer any outstanding questions you have.

Rob: 00:09:53

Thank you, Justin.