Unforeseen Risks in Contingent Cargo Insurance
A few years ago there was a story involving a truck broker and their driver hit with a $5.2 million verdict in a negligent hiring case. Following a serious accident, the courts found that the carrier did not do a comprehensive job of investigating the driver, who had been under the influence of illegal drugs and fallen asleep at the wheel.
It can be surprising what winds up damaging a company. A driver who uses drugs and falls asleep while driving might, in another instance, have been held solely responsible for the accident, or the freight insurance provider might have covered the costs involved. However, because the carrier did a poor job of vetting the driver, they wound up being hit with a $5.2 million charge of negligent hiring.
In short, a comprehensive, responsible approach to the entire process of managing your company is the best way to both prevent unfortunate accidents, and to stay out of the courtroom. Contingent motor cargo insurance is there to ensure that reasonable risks are covered. If you are not going to do your due diligence, then your contingent cargo insurance is a waste of money. Insurance can help you to cover your ends when doing business, but it's not a magically binding contract or a bulletproof shield against any and all charges. Comprehensive insurance means that, if you cover your end, if you vet your drivers, if you maintain your vehicles and your equipment properly, then you are covered when something goes wrong.
Perhaps the most important factor in ensuring that your insurance policy will protect you is ensuring that you have hired the right people. There are a few simple ways to do this:
- Run background checks
- Verify credentials
- Conduct your own testing and additional training
You need to have the utmost faith in your staff, not just your drivers, but everybody to whom you're signing a check. If something goes wrong and the incident leads to legal proceedings, you need to be able to prove that you have done everything that could reasonably be expected of you. If you're investing in contingent cargo insurance, it means that there's quite a bit riding on your shoulders. A comprehensive insurance policy and a comprehensive approach to hiring the right people. There's no reason to take on whatever drivers will have you. There are more than enough qualified, competent professionals out there to keep your business running smoothly.