Freight brokers often face hidden risks with their trailer insurance. Andy Kuchar, President of Centerline Insurance Company, reveals why many trailers are "criminally underinsured" and how common policies exclude crucial over-the-road coverage. Learn the red flags in your current insurance and how dedicated policies protect against massive liabilities, even for small incidents.
Freight brokers operating trailer pools may be carrying insurance that provides virtually no protection when those trailers are in use on the road. Andy Kuchar, of Centerline — an insurance company owned by Watkins Associated Industries, the family behind Watkins Motor Lines that became FedEx Freight — said the problem surfaced clearly when his firm launched a dedicated trailer insurance product roughly five and a half years ago. Kuchar said the first policy he reviewed after entering the market, written by a major carrier he declined to name, contained a specific exclusion for trailers over the road.
The broker holding that policy believed it was fully covered and had thousands of trailers in its fleet. "The coverage was with a great company. It was inexpensive, but it didn't really cover anything," Kuchar said.
"I think you need to start asking some very pointed questions of your insurance agent to say, do I really have this covered? And show me." — Andy Kuchar, Centerline The stakes are rising for brokers following the post-Montgomery legal environment, where plaintiffs' attorneys are increasingly bypassing small single-truck carriers — who typically carry only $1 million in coverage against a federal minimum of $750,000 — and targeting brokers directly because of their deeper pockets. Providing a trailer to a motor carrier adds a distinct layer of liability beyond brokering a load, Kuchar said, because the equipment itself can be named in litigation.
He cited one claim where a worker unloading building materials from a parked trailer was killed in an accident; the trailer lessor was pulled into the lawsuit. "Today to get somebody out of a claim is usually at least $100,000," he said. Small claims compound the exposure.
Kuchar noted that in legacy trucking insurance programs his firm previously wrote, a third of property-damage claims involved losses under $2,000 — yet bodily injury payouts on those same claims ran $50,000 to $75,000 or more as claimants continued treatment to inflate values. Centerline's trailer liability product is aimed at three customer segments: freight brokers that lease trailers and need coverage acceptable to lessors; transportation firms that operate combined motor carrier, brokerage, and equipment-leasing arms; and, most recently, leasing companies themselves. Kuchar said Centerline has signed master programs with half a dozen leasing companies in the last 30 to 60 days.
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