“East bound and down, loaded up and truckin’,
We’re gonna do what they say can’t be done.
We’ve got a long way to go and a short time to get there.
I’m east bound, just watch ol’ “Bandit” run”–Jerry Reed
East Bound and Down
The driver was heading eastbound on I-94, near Ann Arbor. At around 2 PM on October 18, 2016, authorities were notified of a single vehicle incident that took place near Scio Church Road.
Like many crashes, details are sketchy. Fortunately, the driver was not injured and walked away from the scene.
“The beams broke free and some went through the cab and front windshield, just missing the driver,” said Michigan State Police Sgt. Jeffery Munoz.
One report says the driver mashed on his brakes because a car cut him off.
In any case, a number heavy steel beams and smaller steel pieces narrowly missed the driver as they sliced through the cab and continued through the front windshield.
Who should pay for this crash?
Most of us would say, well, the insurance company, right? The carrier had insurance, didn’t they?
Of course the carrier is required to have minimum amounts of auto liability and physical damage. These policies do not cover cargo or freight.
Cargo insurance, also known as motor truck cargo (MTC) insurance, is a form of inland marine insurance, that covers physical loss or damage (but not liability-related losses).
Or does it?
When it comes to cargo, the rights, duties and liabilities of shippers and carriers under federal law are governed under a 1935 law known as Carmack, (49 U.S.C. §14706–Liability of carriers under receipts and bills of lading), as well as general principles of federal transportation law. The federal Carmack Amendment applies to the interstate shipments of regulated commodities, under a bill of lading.
State laws apply to intrastate shipments, and when the provisions of Carmack 49 USC § 14101(b) have been waived.
Carmack defines transportation as: services related to that movement, including arranging for, receipt, . . . storage, handling, packing, unpacking, and interchange of passengers and property. (49 U.S.C. § 13102(23))
One way to cover potential liabilities under Carmack is by cargo insurance. Motor Truck Cargo insurance (Cargo) provides insurance on the freight or commodity hauled by a For-hire trucker.
If the insurance company pays on a claim, it may not end there. The insurance company has a right to reimbursement from the motor carrier for any claims outside the scope of its coverage.
An example would be an an exceptional shipment, such as an over-dimensional item. Policies might contain Unattended Truck Exclusions (unless the vehicle is in a secure area as a building, or under constant surveillance, or under guard) or a “72-Hour Storage Exclusion” if the trailer or semi trailer is detached from the power unit for seventy-two (72) consecutive hours (Sundays and holidays excluded). The policy likely contains an “Employee Infidelity Exclusion” for damages due to mysterious disappearance, the infidelity, dishonesty or criminal act of the Insured, his employees, his agents or others to whom the cargo may be entrusted; including operators under contract to the Insured . . .
Another important exclusion would be for damages caused by improper load securement.
“This insurance does not insure the liability of the Insured for cargo damaged while in transit resulting from improper, or inept loading or improper securement.”
The most common defense raised by carriers to freight damage is “shipper fault,” according to the Transportation Intermediaries Association (TIA). Motor carriers will allege the shipper improperly packaged or loaded the cargo.
Certain commodities like steel can be challenging to secure. Meeting the minimum federal load securement requirements may not always be enough. Sometimes extra securement devices and/or dunnage are necessary and should be the rule, not the exception, to prevent the possibility of a costly cargo claim or worse.
Thank you for reading this.