Trucking Company Shuts Down Due to Insurance Cost Increase

A recent case illustrates that employers and trucking operators who cannot maintain consistent safety records are having a difficult time staying employed in Texas. This Hass to be directly due to the work of attorneys representing injured parties and keeping them accountable for their lack of safety. A recent news story indicated that Fleetwood transportation closed down due to increasing insurance costs. The citation was to an inability of the fleet to secure insurance as the primary reason for deciding to cease operations.

 

Reading between the lines one can essentially say that because the company had been tagged as unsafe in a significant number of prior insurance claims, insurance carriers were unwilling to offer insurance at a low enough cost for the trucking carrier to stay in business. Plaintiffs' lawyers are having an economic effect of beneficial safety by weeding out companies with poor records due to insurance costs. The market is deciding who is fit to be on the roads and who is not.

 

Carriers that have had questionable safety records are struggling to find insurance. Chad Eichelberger, founder of Reliance Partners, a leading provider of insurance services to the trucking industry, said carriers could see insurance rates double or triple in 2020 if they had any accidents with fatalities in the past year.

Eichelberger says a carrier being faulted as the cause isn’t a requirement for rates to jump if there was a fatality in an accident involving the carrier. “Insurance carriers know that if there is a fatality involving a truck, juries will be sympathetic towards the [non-trucking] injured party and may reward damages in the nuclear category regardless of fault.”

While the story mentions that the trucking carrier may not even be at fault in a case because juries may be sympathetic to a situation involving a fatality, it’s important to understand that insurance carriers will vigorously defend claims where they feel they have no fault or liability and may prevail in those cases. In fact, Texas law provides that if there are no facts supporting a claim for fault, the defendant may move for summary judgment dismissing The case altogether.