Trucking Insurance is a hard market. Getting trucking insurance when you have an ALERT or a Conditional Rating is tough. Add in Joint and Several Legal Liability and now we get Nucular Verdicts. One Billion dollar settlement. $1 billion. 100 million dollars ($100,000 000) with a 900 million dollar ($900,000,000) punitive damage award.
John Farquhar
Summit Risk Solutions: summitrisksolutions.ca
1 226 802-2762
John@summitrisksolutions.ca
Linkedin: https://www.linkedin.com/in/john-farquhar-9b88771a2/?originalSubdomain=ca
Chris Harris
Safety Dawg Inc: safetydawg.com
Chris@SafetyDawg.com
1 905 973 7056
Linkedin: https://www.linkedin.com/company/3764255/admin/
Keeping it Safety Dawg Simple!
#trucksafety #truckinsurance #truckpodcast
Trucking Insurance is a hard market. Getting trucking insurance when you have an ALERT or a Conditional Rating is tough. Add in Joint and Several Legal Liability and now we get Nucular Verdicts. One Billion dollar settlement. $1 billion. 100 million dollars ($100,000 000) with a 900 million dollar ($900,000,000) punitive damage award.
John Farquhar
Summit Risk Solutions: summitrisksolutions.ca
1 226 802-2762
John@summitrisksolutions.ca
Linkedin: https://www.linkedin.com/in/john-farquhar-9b88771a2/?originalSubdomain=ca
Chris Harris
Safety Dawg Inc: safetydawg.com
Chris@SafetyDawg.com
1 905 973 7056
Linkedin: https://www.linkedin.com/company/3764255/admin/
Keeping it Safety Dawg Simple!
#trucksafety #truckinsurance #truckpodcast
Hey, good day and welcome to the back to the trucking risk and insurance podcast, where your host, Chris Harris and myself, John Farquhar. We talk about all things, trucking risk and insurance related, and a really interesting stuff. Today. We're going to talk about safety scores, how they relate to your company, your risk management processes and how they have an influence on your insurance premiums. Even if the authorities are not putting you on a radar at the moment, Derek guaranteed, your insurance company is so Chris and I are going to gab about this and we'll have a little fun while we're at it. So let's get at her. Hi Chris. I would say we're going to have some fun on this one. A good topic. No time. Oh my goodness. I tell ya, you know, safety scores, how they relate to your company and your insurance. You've never heard of this. There's a, that there's a relationship. Have, you know? No, never, no, no, not at all. There's there's no, there's no way these could be possibly directly connected wrong. Yeah. So that's what we're talking about here. First one, Johnny, what the heck has SMS? SMS stands for safety management systems and what it is is it's a measuring system with regards to your U S D O T activity. So roadside inspections, which takes into account all kinds of good stuff, which could be unsafe driving, like speeding tickets and whatnot, your crashes, your hours of service, vehicle maintenance, driver qualifications, the cargo that you handle, drug and alcohol and even driver fitness. Yeah. And so in the states, unlike Canadians in the states, they have seven different measuring sticks. They're called basics, but seven different. And John, what happens if we get one of these little symbols on one of those seven measuring sticks? Well That there is a sign right away to start pulling your hair out. Just, just start right there. Just start pulling your hair out because you need to pay attention. I've worked for Those carriers. Yes, exactly. Exactly. So, so what this means is you have one of those basics are in alert status, which is related to the fact that your score has gone over a certain or specific threshold. Yeah. And the FMC say, says that particular symbol based on the data indicate that FMC S may P may prioritize the motor carrier for further monitoring. Yep. Isn't that lovely? So when you see one of those, you should be getting very concerned because John, I guarantee it that the insurance company is concerned. Well, they will be more than concerned. Yes. They'll be wanting to know what are you doing about this now, But why would they be concerned? Just you guys, you've got an alert symbol on one of these records or in Canada, you might be conditional on your CVR. Why in the heck does he insurance company even care? Okay, Well, they're looking at it because it's all based on your performance as a motor carrier, your drivers and how you're doing. And if you're getting into these areas of concern, so a conditional rating or an alert stat, that means you're not paying attention to what's going on with the activity on your carrier profile, which tells you right off the bat, you had an opportunity to do something about it before it became critical, but now you haven't. And now this critical scores come into play, which is alarming and concerning, particularly for insurance companies, because they're thinking you're not doing what you're supposed to be doing. They're not doing what they're supposed to be doing. And the lawyers out there pick up on that, should there be a crash and the insurance company figures, Hey, the claim is going to settle for more. If you have an alert, then if you don't have an alert, Correct? Correct. Because the lawyers are going to be able to paint a picture that says this carrier is not a safe carrier, because look at the alert status, look at their satisfactory rating, or in this case, a conditional rating, how were they allowed to continue to operate? Because they're not paying attention to their safety management. I just wanted to highlight the difference here between the FMC, as a says, they may prioritize you where it is my belief that the insurance company darn well will prioritize you. Yeah. Well, and, and, and we can, we can definitely confirm that for the simple fact that you and I have both worked for insurance companies. And that is exactly what we as insurance professionals at that time, did we prioritize those areas? They were key component in us looking at your risk management and wanting to know what are you going to do Exactly. And brings us right. When you say, what are you going to do brings us right to the next topic point, because on your SMS, they've got a neat little button right below those scores. And it says, how do improve? And if you click on that, it takes you right to the different areas. So you see the different benchmarks here. The unsafe driving is one of them. That's one of the seven and it tells you, Hey, read regulation 3 92, and 3 97, familiarize yourself with those regulations because that's largely what falls into the unsafe driving and same with the hours of service and the driver fitness. So I just want all the carriers out there to see that at least in the states, it becomes pretty easy to try to figure out what does all this mean and how to improve you click on the huddle, improve. It takes you to here, and then you got some homework to do, but they've tried to make it clear. So, Well, I'm just going to say Ontario's got a great website with, with a number of their safety standards that they provide. You know, the modules that they have and the bonus part is whether it be the U S or whether it be on Tara. And I believe Alberta has a great website as well on, on free information. It's all free. You know, if you understand the regulations, you understand what you must comply with. And I, I want to rephrase that or restate that must comply with, okay, so these are things you must do. And once you have the basics in place, you go, wow, okay, this is very easy to comply with all I need to do this. And then from there, you can go, Hey, why don't I put some best practices in and raise the bar and wow, we can be a better operation than we are. Yeah. And Hey, let's do a little self-employment plug here. And if a carrier needs help putting any of these things into place, John's here. And I am here, reach out our contact info is in the show notes, whichever lovely bearded, old guy you want to reach out to. We'd love to help you. All right? Yeah, we can, we can, we can guide you in the direction you need to go and, and help mentor your staff and teams on how to better manage these situations. And you're saying, And the reason is that we want to avoid a situation like this crash. Yes. This poor young man. Yes. You know, this man lost his life. He was 18 years old when he successfully stopped at a 26, I think it was 26 vehicles were involved in not involved in the crash. Sorry. A truck rolled over caused a backup of 26 or so. Vehicles had been there for approximately an hour when a, another truck ran into the rear of this young man causing the fatal crash. And you know, this poor man and his family are paying the price and no amount of money will ever replace him. However, you know, cause I hate just talking about the dollars and cents of it all. It sounds like we're just totally ignoring that some 18 year old lost his life. And that I'm not trying to do that. I'm trying to say it in such a way to get other trucking companies, to wake up and to do some of the things that are necessary so that we avoid another loss of life. So look, look at the headline here, John, a two trucking companies hit with a 1 billion, not a typo. That is a B and John D out of curiosity, because I had to look this up today. When I was reading this article, getting prepared for this, how many millions are in a billion? I believe that is a thousand million, A thousand. I had to look it up because I thought it was a hundred million, which to me is a lot of money. And it's not. It's a thousand Million. That's a lot. That's not might bankrupt me. I say that Pretty close. You might be able keep your Tesla. I think it might just bankrupt me, but Hey, making light of it. But so this is a crash. And what happened was the first truck driver, by the way, turned over his cell phone records. And the court proved that the first driver was on a cell phone. By the way, the second truck that hit the backup is a Quebec company or based out of Quebec. And when the court subpoenaed the records, they never turned over the records for the driver. You know, because it was out of country, I guess they didn't have the long arm of the law. Get them. John, what do you think that indicates if the truck driver or the trucking company refuses to submit evidence? That's a, to me it's a quick indication of guilt when you're trying to hide something, you know, if you were not guilty, you think you would provide that evidence to say, no, no, I was not. Here's my information and check it out Pretty darn quick. I think you'd be providing the, the proof that you weren't guilty because you know, right now trucks are still driven by humans and humans can make mistakes. However, a lot of them, you know, we can minimize the amount of mistakes by staying off of distracting devices. Yes, yes, totally. On that tough topic. But you know, years ago I read about a guy in New York state got convicted in court. He gets convicted for watching pornography while he on his laptop, all cruising down in New York interstate. And really, if you want to shock yourself, us men, supposedly men, I honest to God. I thought when I Googled it, I'd find that story immediately. I was really shocked and disappointed to find many stories. Oh, many, not one, But I couldn't find the one about the New York state driver because there was too many others. Oh, men are just whack. Okay. At least some of this, but anyway, and that's a different flow of distracted driving. Yes. Nonetheless, needless and preventable. Yes. So whatever form of distracted driving, you might participate in, please get off whatever it is. Stop, stop. Because this leads us to where I wanted to get to. Is this terminology called joint and several it's a lawyer terminal it's No. Oh, oh, that joint. Oh, so several of those joints. Okay. Yeah. No, I don't think that's what it stands for. Tell us, tell us What it stands for. What does it stand for John? You got to kind of a definition or an understanding. I'm going to Let you explain it. Cause I know you've got the exact terminology. I don't have terminology, but joint and several and the easiest way to explain it to our listeners and our viewers is a quick story. When I was with the insurance company, we had a company from Ontario, they were down in Montana or someplace like that. And the truck driver is driving along, sees a single vehicle rollover. So being a good human being, being a good person, he quickly pulsed to the shoulder of the road, puts the four ways on, I believe hops out of the truck and starts to run, to render assistance. He doesn't get more than 10 feet away from his truck before he hears crash. And under the ICC bumper now is a car and in the car, there's an injured passenger and a dead driver. And the driver died from the impact of the ice hitting the trailer. So yep. The insurance company I worked for at the time, ended up writing a check, sorry the passenger sues the dead guy. All right. So you Sue the estate. And in this jurisdiction there was minimum insurance of $25,000. And so that's what this particular driver has was 25,000. The lady who was in the car, we had the private investigators do some investigating and she was a lady of the evening. However, because that's very difficult to say in court to not, to really being impossible when she claims to be a model. And of course her face got cut in the impact. Right? And she's now saying her modeling career has been severely limited. Therefore she's suing the dead guy. And this is a number of years ago, about 20 years ago, she was suing the dead guy for $250,000. So the insurance company that I worked for quickly wrote a check. We negotiated, stay out of court and wrote a check for 165,000. Well, of course now the trucking company that we insured is full lipping out. And I understand why, I mean, they're going, what did my driver do wrong? And you're putting $165,000 loss on my loss run. That's not fair. Right? Correct. And this is where we had to get into joint and several legal liability. I had to explain to the carrier that Hey joint, and several says that if you are at least 1% at fault, one that they can have access to a hundred percent of your insurance policy. Yes. We had a $5 million insurance policy on this carrier. So we were anxious to settle out of court, not to go to court because you never know what the jury or the judge may award. And so when the lady accepted 165,000 from us, we were happy. So she got her 165 from us. She got 25 from the estate of the driver. And I guess she was happy because she that's what she accepted. Yep. Yep. Now that was 20 years ago before is called nuclear verdicts for$1 billion verdict. So this is what you've got to be aware of. So yeah, getting back to this billion dollar settlement, this fellow who lost his life, the billion dollar settlement, if we can get back to that story, talking about joint and several, the court ruled that the first trucking company, the driver that was distracted for sure, because we have it in court documents rolled his truck over and caused the backup was 10% at fault or responsible for this individual's death. Right. Quebec company that rain into the, the whole mess was 90%. Yup. Correct. Well now what I don't know from the stories is how much insurance did the one, the first trucking company, the 10% or a have and how much did the Quebec company have? Yes. And answer that. I can answer that. I, I read something early on about that and the first truck was a U S truck and I think it had $1 million us. And then the second one, I believe had$2 million Canadian for, to be able to come into the U S because they needed a minimum of $750,000. So between the two of them, you know, you got what, two and a half million dollars. So going back to joint and several, and this is what we don't know, or at least, I don't know, maybe, you know, because you've read different stories who was, you know, as a trucking company, they w they don't understand who gets named in the lawsuits. And one of the reasons that you name everybody such as the truck drivers usually get sexually named in the lawsuit is because if they can possibly pull in your personal auto insurance, now they're stacking on top of the two or two and a half million that you're talking about that the trucking companies had. So we've got two truck drivers in this case, if they each had a million dollars personal car insurance that might get thrown into the pot, who else could we name possibly in a lawsuit like this? You've got truck owners, truck owner, owners of the company can be called into this. You know, again, be depending on neglect the manufacturer of the vehicles or the leasing company of the vehicles, the trailer, maybe if it was a, say it was a third party that they had, interlined the trailer with or something, those folks could be called into the, into the, The lawsuit I've seen. What do you call a third party? Logistics providers, Brokers, brokers, and whatnot. Right? Because we know that there's a story out there of a freight broker who did lose 23 and a half million dollars because they were named in a suit like this joins in cyber. Yup. Very much so. Yes, exactly. And that's what it means. It's, it's it's joint because they're going to get multiple policies in play here, join them together to get as much money of as they can. And several comes into play with it. Yeah. There's going to be multiple people that are going to share in this award is it, we call it. So, you know, I just really wanted our listeners to know today. Well, let me ask you a question. What do you think the odds are of this poor family who lost her son, seeing the billion dollars that they were awarded A boat this month, zero, zero chance. So it's, it's just, it's too big of an award. The two companies in question, the two motor carriers are already both out of business. They've closed up doors and can't find anybody. I believe if I'm not mistaken, the one of the companies. And I can't recall which one now off the top of my head, didn't even show up for the court hearings and proceedings didn't even show up. So didn't even bother. And their lawyer actually walked away because they said, well, the company's closed it up. Nobody's communicating with me anymore. And I'm not getting paid. So I'm out of here so that I know that weighed heavily on the award from the jury. Yeah. So I mean, this poor family will receive several million dollars from the insurance that is provided. However, I agree with you, the chances of seeing anything even close to a billion, they just won't see it, which is unfortunate because yup. And what our listeners and viewers, sometimes we forget is when an accident like this happens, when a collision like this happens, the only thing we have is dollars to compensate. And it's very hard to say how much a life has worth in this court action. They said the life was worth $100 million and the bad behavior that needed to be punished because that's what punitive is, is to punish the carrier. Or the driver punitive damages were 900 hundred And, and punitive damages are not covered by your insurance provider. Ah, yes. Less least. We forget about that little detail. That's right. And thank you. I forgot when I was preparing these few slides, that punitive is not because here in Ontario, it's great. As we know, but in most jurisdictions throughout north America, most of them, it is not Gregg. Yup. It is black and white and punitive is not covered. So I don't know how this applies to that Quebec company. Right. You know, are there any, Well, it won't be going to the, they won't be going to the U S anytime soon, I'm sure that, but, and the sad part is, you know, so you've got a very large reward here of a billion dollars and it's split into a hundred million dollars. And $900 million is split into the chances of seeing that money are, you know, next to nail. But what it is done is it has set a precedent in the industry. So this will be a court case that will be applied by many lawyers and judges down the road. There'll be, there'll be referring back to this to say, well, we got this much money and we got that much money, and now we can go higher. We can get more. So, so this, this is on the books now. So it's going to be interesting to see where it goes. Yeah. 900 punitive in most areas is not covered by insurance. Therefore, it's a good reason to have you, when you set up your trucking company, if you have assets, you talk to your lawyer, you talk to your accountant and say, how can I best construct my organization to protect my assets? Because something like this is now rule, sorry, something like this is now real. You know, we both, at least, I know I read the previous one to this 1 billion that I used to cite or try to talk to the trucking companies about was the$350 million suit in California, where the two young children, unfortunately watched their parents burned to death because a truck rear-ended the car. And you know, what is that worth? When two young people who had stepped out of the car for whatever reason, watch the parents perish in a fiery crash while the court said it was worth $350 million. Yup. Yup. Yup. Well, and this is what's fueling these nuclear verdicts is you're getting juries or lawyers or are utilizing the reptilian theory with the jurors, getting the jurors mad. And it's got nothing to do with the crash. It's the pain and suffering that's been caused. And that's, what's fueling these very large rewards. And, and some of them are ridiculous. There's no doubt, but they're setting a precedence and boys, you can't buy enough insurance to save your butt on this one. You've got to do a better job and not get into these situations. Yeah. And unfortunately, both truck drivers, it would appear we're just driving distracted because the second truck driver, the company from Quebec who rear-ended and did the horrific part of it, they showed that the brakes engaged just one second before impact back one second. Okay. It was key. That was really, yeah. That's unbelievable. You know, you know, to, to one to find that information, the telematics data that's available is phenomenal in that area, but it just really goes to show right down. So we've talked about this before on the podcast, when we've talked about perception and reaction time, right? So you're a second and a half between perception reaction, and then add in their lag time from the air brake system is another half second. So we're talking to two, two full seconds. So this is really sad because they say the brakes activated, well, there's a half a second lag time before the brakes can even engage to do anything. This, these brakes did nothing, nothing and, and long before it shouldn't, or that was way too late before when it should have happened. And I don't know, we, we, we talk about distracted driving and it's a huge pet peeve for both of us because it's preventable. It's really easy to just stop being distracted, pay attention. You know, we did the, have these crashes back when you and I were driving, we didn't have these little things to bother us. And while we were going down a road, we were busy looking out the road and seeing what was going on. But To be the devil in this conversation, it is not easy to drive, just not without distractions, because we're so used to holding that devil his device in our hand. We're so used to every time it pings or vibrates that we check it, you know, and now we're driving a truck for three, four hour periods of time. It's really hard. Let's be honest. It is hard for a truck driver to ignore that for that length of time. So, and I know you, you used to do this. Do you have a suggestion for truck drivers who have decided that they want to drive distraction-free or, or as much as possible? Where do you put yourself home? I actually put it on, I don't turn it off, but I put it on silent and I, I place it out of my reach. So sometimes it'll go in the glove box in my personal vehicle, I have a center console to go in there. It's, it's put it out of reach where I can't get out of it. I'm not enticed to, to look at it, but I turn it, turn the sound off. I don't want to hear it. I don't want to hear it going. Bing, Bing, Bing, Bing, Bing. Every time it needs milk coming in, you know what nothing is that important that we need to risk our own lives or somebody else's lives. If you're concerned after driving for an hour or two, and you're going, geez, I think it's probably been going off then pull over in a safe place and check your phone. Okay. So with that, Johnny, I just think that, you know, those articles that come up with truck drivers, especially truck drivers, they don't realize what they're doing to themselves by having a crash. They're very repentant when they have a crash, of course. But if, if it can be proved that they were distracted at the time, they're going to be personally named, they could lose all of their personal assets because punitive damage isn't covered by insurance. And I wish that drivers would hear more of that. Exactly, exactly. You know? So it, it is a challenge to be non distracted, but we have to make a valid effort to say, enough's enough. You know, it's not going to go away unless we say to ourselves enough is enough. We can't have this any Well, and you're only talking about cell phones kind of when, when we're talking about distractions. Cause There are exactly, there's so many more things. Yes. Anything that takes your eyes off the road or takes your concentration away from driving is considered a distraction. So marital problems could be a distraction. Sure, sure. Family members with health issues. Yeah. Health issues and upcoming a happy event. It doesn't have to be a negative event like a divorce or something exactly. Or a health issue. But if you start thinking about your child's wedding or your child going to school or worse, how am I going to pay for my child going to school? Yeah, yeah, Yeah. But anything, again, like you said, anything takes your mind off the task of driving is this distraction. It is a distraction. So try and it's very hard for drivers because you are out there for hours at a time with only the highway to look at. So it's easy to get distracted. Yup. Yup. Yep. So take frequent breaks, you know, get off the road, pull into a rest area, get out and do a little walk around if you're bored or needed to look and then check your phone, then if you want, you know, have a drink, have a bite to eat, don't be doing it while you're driving down the road. We've seen crashes that involve a waterfall. Usually something non-alcoholic would be best. Yeah. Save that for the weekend or after hours. So Yeah. Yeah. Or have a smoke, but again, clarifying. Yeah. What kind of a smoke exactly. Illegal smokes. Tobacco smoke. Okay. Yeah, Exactly. Yup. But I just, you know, the sad part is there's more that we can do individually for ourselves and for other people and we just need to do a better job. Yep. Johnny as always. Thanks. I think this was a great episode. Hopefully the drivers safety professionals, trucking company owners all here, this story about joint and several and punitive damages. Yes. Agreed. I agree. Save your butt. Don't get into that situation. Yup. And that's it for this week on the trucking risk and insurance podcast, where we talk about trucking, trucking risk and insurance for trucks. So Hey, I'm saying goodbye. And if you celebrate Christmas because we're taping this two weeks before Christmas, Hey, Merry Christmas. If you just get a few days off over the holidays, have a great period of rest and relaxation. Hey Johnny, Merry As well. You Merry Christmas, Chris. And as we used to say back in the day, have a happy Christmas and a Merry new year. Take care of Y'all. I have a good one.