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Driving coverage concerns: Contingent third-party hauling

By James Sallada , Ben Powers and Ed McNenney | December 20, 2023

Risks and potential liability from automobiles and trucks have been a preeminent concern. A new topic has emerged regarding the liability from hiring third parties to haul property and products.

Risks and potential liability from automobiles and trucks have dominated conversations between insureds and insurers over the past decade. Societal dynamics of distracted driving, social inflation, and nuclear verdicts fueled in part by third-party litigation financing, have forever changed the underwriter’s view of excess liability. A new topic of concern has emerged in underwriting discussions regarding the liability that insureds face from hiring third parties to haul their property and products. At the same time, courts are considering the liability of third parties for accidents arising from the haulers.

For decades, the principal risk concern for insurers of non-trucking firms regarding hired and non-owned liability emanated from employees renting cars on business or using their personal vehicles for business purposes. While the principal basis of pricing auto liability consisted of the number of owned or leased power units, some insurers would request insureds’ rental car receipts or similar information to attempt to quantify the potential exposure arising out of hired autos. This was generally a minor issue for insureds with large fleets, as the hired exposure was comparatively small, but it could become a more relevant question for professional firms such as geoscience and engineering which saw extensive employee travel. However, the broader insurance community generally viewed the overall exposure as fairly benign against the background of commercial auto underwriting as a whole. 

Emerging litigation landscape

The trend of skyrocketing verdicts, which some pundits have labeled as “nuclear,” has progressively impacted the liability marketplace over the past five years. Delays in court dockets during- and post-COVID have challenged insurers’ adjusters and actuaries’ ability to accurately reserve for the increased volatility of judgments, and the plaintiffs’ bar is increasingly pursuing creative maneuvers to seek non-traditional sources of recovery for personal injury claims across all case types.

These changes have extended to trucking litigation. The average size of verdicts in the trucking industry has sharply increased, with the number of verdicts over $1 million increasing by 235 percent in recent years according to one analysis, dwarfing the rate of overall inflation.[1]

This dilemma reached a series of flash points in 2023, with several large claims involving third-party hauling firms and brokers. While the details and dynamics have varied case-by-case, the claims tend to involve significant plaintiff injuries and an underlying defendant hauling firm with limited insurance policy limits. Federal appeals courts have reached varying conclusions as to whether a contracting third party can be held liable for the defendant hauler — but the exposure is clearly there.

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  1. U.S. Chamber of Commerce Institute for Legal Reform, The latest news, posts, press releases, and media from the U.S. Chamber Institute for Legal Reform. Return to article


Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.


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