Freight Brokerage Revenue

We are often asked, what revenue basis should be used in determining overall revenues for our freight broker insureds?

The answer is simple- all gross revenues billed by the broker under their authority during the policy effective dates. Note our coverage is designed to cover all brokerage operations per the policy form subject to the terms, conditions, warranties and exclusions.

While the answer is simple, the explanation is not. Freight Brokers typically bill gross billings to the shipper, pay the carrier and have net income (typically between 15-20% of the total freight bill). In an effort to lower their premiums, we sometimes see agents and insureds providing us with net revenue. That is not acceptable to any insurance company we do business with, nor is the revenue defined as net revenue. In these cases, an ugly audit additional premium occurs and can leave all parties unhappy. That said, the gross revenue requirement is a black and white issue to all insurance companies and any deviation is a non-starter overall.

Note it is not that the insurance company is trying to gouge any insured; moreover, current rating is based on the loss cost of gross revenues.

Other considerations:

  • Affiliate operations- A freight broker insured will often have an affiliate trucking operation that they broker loads to (we discourage this type of operation because it exposes two operations (the freight broker and the carrier) when the shipper could be doing business just directly with the carrier. Most insurance companies exclude freight brokerage losses to the affiliate operations so they do not stack limits with the carrier’s policy. While we can sometimes get this coverage added at an additional premium, it is mostly excluded. While many agents and insureds would like to exclude affiliated revenue to lower the premium, the rate offered is discounted for this exposure- and therefore the gross revenue is used as defined in the policy. It is also much easier to audit the financials based on gross revenue.
  • Non-transportation exposures- Note sometimes a broker will provide non-transportation services ( carrier bill auditing work as an example. The agent and insured will sometimes want to exclude this income as well. Again that is unacceptable to the insurance companies- and the freight broker can as easily be sued for non-transportation exposures as transportation exposures.

So please understand that in all cases, the insurance company has rated the policy on gross revenues- and will look to be paid on gross revenues multiplied by the policy rate.

Record Keeping Requirements and Best Practices For Freight Brokers

The Transportation Intermediaries Association, which has about 10% of the nation’s freight brokers as members, is an extremely political body and sometimes is viewed as too self-serving to its constituency–lacking in what might benefit other non-member freight brokers and other related industries. But that is what lobbyists are supposed to do, right?

That said, they can provide important, effective education to these very freight brokers and to the stakeholder industries that serve freight brokers. To this end, they brought up an article that piqued our interest, and we felt it is worth sharing. It is on the rather dry subject of record keeping (Big Yawn…)

Why is this important? Because at the end of the day, it can save a freight brokers’ bacon, and without adhering to both requirements and best practices, can conversely cause irreparable harm to a freight broker’s livelihood.  So, we are approaching this in 2 ways:

  • What record keeping is required by the Federal Motor Carrier Safety Administration (FMCSA)?
  • And absent regulation, what are record keeping best practices for third party bodily injury claims and cargo claims?

What is required by the FMCSA?

Brokers have to keep a record of every transaction for 3 years, including:

  • The name and address of the consignor
  • The name and address of the originating common carrier
  • Bill of lading ( or related documentation)
  • Amount of brokerage compensation and the name of the payer ( typically the shipper)
  • Freight charges and date carrier was paid

For insurance agents working brokerage business, you can size up a broker quickly by checking to see if they have this information. That said, Transportation Management Software (TMS) typically will handle all these functions. It should not be a big deal–but it is required.

Interestingly, for freight brokerage claims, there are virtually no requirements for record keeping by the FMCSA. Yet for obvious reasons, having an organized, systematic approach can be very helpful to freight brokers, their insurance companies and defense counsel. Before we go through the list, it might be worth knowing what we ask from our adjustors for every single claim we get.

Here it is:

  • Claims details
  • Certificate of Insurance from the Carrier
  • Broker Carrier Agreement the insured has with the Carrier
  • Carrier Name and MC/DOT #s showing their operating authority
  • Carrier vetting information showing how the insured qualified their carrier for use.
  • Any communication from the carrier’s insurance company.

Note while this has nothing to do specifically with a broker’s record keeping, it does have a great deal to do with the operational best practices of a broker- which is in conjunction with record keeping best practices. So what is needed for third party bodily injury claims and what is needed for cargo claims?

The Bodily Injury Catastrophe Claim:

  • Claims Details
  • The Police Report
  • Any photos
  • Any media
  • Transcript of statement with the carrier
  • Carrier’s Insurance Company Contact information
  • Copy of Carrier’s Insurance Acknowledgement

In obtaining the aforementioned information, it can be more important to make sure you keep low profile. Why? Since freight brokers are not legally liable by authority, it is the carrier’s and carrier’s insurance’s responsibility to defend and indemnify. Raising the freight broker’s profile by demanding a lot of information in a loss, can tether a freight broker to a suit- and raises the prospect for inclusion.

Your claims adjustor, defense counsel and lawyer should be your guide as to what you information and when you need it. Ask Them First!

The Cargo Claim

Here is what is needed:

  • Claims Details
  • The Police Report ( may not be one)
  • Any photos
  • Any media ( may not be any)
  • Transcript of statement with the carrier
  • Carrier’s Insurance Company Contact information
  • Copy of Carrier’s Insurance Acknowledgement
  • Copy of Shipper contract applicable to the loss ( may not be one)
  • Proof the shipper or consignee filed the claim against the carrier to prove damages

Note that you can see some similar claims information record keeping needs between the bodily injury claim and the cargo claim. But it is worth noting they serve two completely different interests. In bodily injury claims, everyone is on the same page. That is, let’s avert any and all liability as much as we can.

Conversely, with cargo claims, it is the freight broker’s customer. He may want to have the insurance company pay the loss (with the carrier or carrier insurance failure to do same), while the insurance company may want to limit any and all liability. That makes record keeping more important as all insurance policies have terms, conditions, warranties, and exclusions which need to be addressed before acceptance or denial of a claim and this makes record keeping more important.

In summary, you and your freight broker should understand the FMCSA record keeping requirements, but also create a standard for record keeping best practices in claims. It will make the freight broker and their insurance companies do their job better.

The Problem with Affiliated Operations to Freight Brokerage

I frequently write about topics that I think both insurance agents and freight/truck brokers need to know about. The point is not to provide pejorative or even special insight; moreover, while my point of view can be viewed as merely that- a point of view, it has to be worth providing information that will hopefully not be viewed as conjecture. In this case, I am told by my logistics underwriting team that neither insurance agents nor freight/truck brokers are “getting it” with respect to affiliated operations. So my charge here is change that with this narrative.

So what are they “not getting”?

1) Insurance carriers writing freight brokerage do not want pick up additional exposures that are not freight brokerage.

2) Insurance carriers writing freight brokerage do not want to be writing commercial auto business.

3) Insurance carriers writing freight brokerage often exclude loss involving any affiliated trucking operation.

4) Insurance carriers writing freight brokerage always exclude loss when the insured is operating or representing themselves as a carrier.

Of course, that makes sense to anyone in the insurance business. After all, for trucking operations, commercial auto insurance is the solution- not freight brokerage insurance for trucking operations.

But if the point is to cover the freight broker, why doesn’t coverage apply when a freight/truck broker brokers freight to an affiliated trucking operation since the trucking operation will have its own coverage. The problem, due to regulations, is how the insured represented themselves to the general public as to what the operation was at the time of loss. Were they a trucker or a broker, or both? In a catastrophe claim, there is a high likelihood that the court will look to both the trucker (with their commercial auto policy) and the freight broker (with their freight brokerage policy) and to stack limits (pooling available assets and their insurances).

Stacking of limits is most certainly a bad thing. And the brokering of freight to the affiliated trucking operation is really a poor choice when the carrier could have just taken the load directly from the shipper. Risk Management 101 would advocate only utilizing one company when given a choice of using only one company versus two companies (again the freight broker and the trucker).

So why would a combined carrier-broker operation broker to themselves?

The answer is sales. It is deemed easier and better for relationships for a combined carrier-broker operation to be able to say to the shipper that “we can put the load on one of our trucks, or if our trucks are currently dedicated and not available, we can broker the load to one of our friendly outside carriers”. We have even seen certain transportation attorneys recommend that all sales for either the carrier or the brokerage to emanate from the brokerage operation. So, the idea is that all sales would come through the brokerage and flow to the carrier and then to the brokerage operation as the backup. That way, the sale is not lost. Makes sense? You bet, but not when you consider the regulatory, contractual and operational issues. I will show you why.

Regulatory Concerns

With respect to regulations, I have been told that the legislation of MAP-21 (Moving America towards Progress in the 21st Century- the Highway Infrastructure Bill signed by Obama) set forth the rules and the playing field guidelines by which carriers and brokers operate. Specifically, a broker shall not represent themselves as a carrier, and a carrier shall not represent themselves as a broker. So when an entity operates as both, the regulatory compliance issues become problematic. How is a court to determine how the operation actually represented themselves to the general public? The likelihood of the brokerage operation having an agency situation with the carrier is high. Just ask any defense council. Again if the shipper just used the carrier directly, this would not be an issue.

Contractual Concerns

Then to make matters tougher, there are broker-shipper contract issues. Even though MAP-21 decrees the actual authority must be named in the contractual agreement, many carrier broker operations have the carrier named in the contract versus the broker (or no mention of the brokerage entity at all)- so even if the load was brokered, the carrier broker entity has represented themselves as a carrier to their customer. So the prospect for the broker only be viewed as a broker becomes problematic based on contractual issues.

Operational Concerns

Finally, the operational issue of affiliated entities makes it harder overall. A freight/truck broker is licensed with an MC number and is viewed as an independent contractor in the marketplace. If assets in the form of an affiliated carrier are added to the equation, then the insured has a hard time just representing themselves operationally as a broker.

Solutions

Can losses or claims involving brokered freight to an affiliated carrier be covered under a freight brokerage policy? Yes, by exception but there has to be great data on the carrier and an agreement that the carrier will indemnify the broker for any and all loss. Another solution, since losses from affiliated carriers are most often excluded is to have the freight/truck broker added as an additional insured under the carrier’s commercial auto policy. That said, many commercial auto carriers are not delighted to add a freight broker as an AI, and they often exclude any loss from all freight broker operations.

Other considerations

It is worth noting that brokering to affiliated entities can also mess up commercial auto coverage. Why? Because for interstate commerce, all commercial auto policies are going to have a financial responsibility filing with the FMCSA or what is known as the MCS-90. If the bill of lading on a brokered load is incorrectly in the carrier’s name, the carrier’s insurance will become applicable and typically primary- irrespective of a brokerage exclusion.

I hope insurance agents and freight brokers with affiliated asset operations now “get it.”

One final discussion point

Freight brokerage’s, even small ones, are highly profitable and valuable assets. By involving them with affiliated operations, you are getting a risk management zero as you again can create an issue of stacking limits between the carrier and the broker.

Sales aside. You can see that such a strategy is playing in a fire. Practice safe brokerage!

Contingent Cargo versus Primary Cargo

Why the Need for Hudson’s New Primary Cargo Coverage

1) Where the Logistics Cargo Insurance Business Now Is

As underwriters for Freight/Truck Brokers, the GTU Logistics Underwriting Team gets to see how the insurance industry responds to freight cargo claims. We get to see how our competitor’s coverage works in a cargo claims situation (or mostly does not work), and we also get to see how our own logistics insurance companies respond to freight cargo claims. While we know our logistics insurance coverage is better than the rest of the marketplace… period (this is corroborated by external coverage attorneys), we are chagrined when there is failure by even our insurance companies to pay a loss.

The insurance industry fails when it cannot meet expectations. In most cases, when an insured files a claim, they are expecting their insurance company to defend and indemnify. When they find out that the policy terms, conditions, warranties and exclusions do not cover that loss, it is a loser for all stakeholders- the insured, their agent, their shipper, their consignee, the MGU, and even the insurance company. One could argue that the insurance company benefits by denying the loss. But it is only a temporary victory as the insured and their agent (if not fired) are looking for coverage that can pay that denied loss in the future. It is just the way it is.

2) Explaining Coverage

When looking at coverages, it is important to understand how they work and who they ultimately benefit. The coverages for contingent auto liability, truck broker liability, general liability and excess liability cover some component of the insured’s legal liability for bodily injury and property damage. They serve to benefit the general public (and ultimately the insured) by paying for losses in instances such as negligent hiring, negligent entrustment, and vicarious liability that the insured would have to pay out of pocket without insurance. It is also worth noting that the insureds have neither the luxury nor the option to self-insure as many (most) of their shipper contracts require the insured has these coverages; so the shipper can hopefully be removed from vicarious liability.

Conversely, contingent cargo, primary cargo, shipper’s interest, and error and omissions coverage are for the benefit of the insured’s customer, the shipper, or the shipper’s ultimate customer: the consignee. Except for shipper’s interest (first party coverage), all these coverages are insuring the legal liability for cargo loss. In the case of errors and omissions, coverage is typically provided based on what happened as a result of that property loss. Our focus today is on that property loss; that is, the cargo claim.  It is worth noting that cargo coverage is required by shipper contract, just like the aforementioned coverages for bodily injury and property damage.

3) Cargo Legal Liability Explained

So what is the insured’s legal liability for cargo loss? Are not Freight/Truck brokers absent any legal liability by their authority with The Federal Motor Carrier Safety Administration? The answer is yes. A freight/truck broker is not legally liable by federal authority. And, in truth, it would be great for the freight/truck broker to be able to say to their customer, the shipper or their consignee, in the event of a loss or claim, that we are just an intermediary in the supply chain, and we hope you can work out the claim with the carrier we found for your load. But that is not how it works.

Shippers know that Freight/Truck Brokers are not legally liable by authority. So, as previously mentioned, they hold the freight/truck broker responsible by contract (typically a broker-shipper contract), and require complete indemnification for any and all loss involving a freight transaction that includes the freight/truck broker (irrespective of whether the carrier’s motor truck cargo legal liability coverage responds to that cargo loss or claim). Suffice it to say, they want the freight/truck broker to be responsible for anything involving their freight on carriers hired by the truck broker.. period. Not only is indemnification required but also some form of cargo insurance – and that is why we are discussing this topic today.

4) The Freight Broker Cargo Claims Dilemma

In a typical cargo claims scenario, the freight/truck broker is often assisting shippers/consignees in getting restitution from the carrier’s insurance company, or if that fails, the carrier. So while they are not legally liable from a Federal authority basis, they are legally liable by contract. And in many cases, they can be handling hundreds of loads for the shipper, and cannot afford to have a small carrier or the small carrier’s poor motor truck cargo insurance coverage refuse to pay a claim. It’s simply bad business.

I have often argued that a freight/truck brokers are becoming more and more like freight forwarders, who are legally liable by both authority and by contract to their shipper. While a freight/truck broker will never be liable by authority, the issue is that freight/truck brokers want to be responsible for cargo loss and make their customer whole. With that said, they want to transfer any and all of that exposure to their cargo insurance carrier.

5) Contingent Cargo Explained

So that is where we are. The insured needs to take care of their customer. So isn’t contingent cargo good enough?  The answer is yes and no. To understand how it fits for your insured or does not, one needs to look at the insured’s contractual liability exposure to the shipper, and if contingent cargo is going to be there in most, if not all cases. Unfortunately, frequently contingent cargo insurance is not enough.

So what triggers contingent cargo? Two things. One is the failure of the carrier’s motor truck cargo legal liability insurer to pay for loss. The second is failure of the carrier to pay (in cases where the carrier’s insurance first failed to pay). Typically most insureds have a broker-carrier agreement that requires the carrier or carrier’s insurance to pay for any and all cargo loss and indemnify our insured. Sounds good, right? Wrong. While the carrier may have motor truck cargo legal liability coverage, neither our insured nor the industry, have any idea as to the quality of that coverage. Does anyone know the terms, conditions, or exclusions of the policy? Nobody is getting that information from a certificate of insurance (the certificate of insurance is a failure again of the insurance industry but that is another subject). Is it a specified auto policy? Does it cover employee fidelity? How about refrigeration breakdown or the driver simply set the wrong temperature? Or unattended auto? Or imposter theft? Or are there commodity exclusions? How about wetness excluded? Coverage for adulteration? How about broken seal?  What happens if the trucker is not legally liable due to Carmack provisions such as acts of God? Is our insured liable for all these types of losses to the shipper? Probably. The shipper indemnification provisions in the broker-shipper contract do not exempt the insured from these losses. Sound like a recipe for failure? You bet.

And to add insult to injury, most insurance policies exclude contractual liability, which is the whole reason freight/truck brokers are buying insurance in the first place. Why do they do that? Because they do not want to insure lock, stock, or barrel, any broker-shipper contract per se. They will add shippers as additional insureds or loss payees but they do not want to have their insurance policy expand coverage to whatever liability is in that broker-shipper contract. Not very helpful, is it? The answer is no it is not helpful at all.

So back to contingent cargo. We have discussed coverage triggers, but what is it designed to do? While an insured could be furnished with a bogus certificate by the carrier, the main exposures are twofold: DIC (Difference in Conditions) or Excess Coverage (not enough limit to pay for the cargo loss). Difference in conditions would seem to be perfect coverage, if there were not terms, conditions, and exclusions preempting claims payment. One of the biggest examples we see is the refrigerated food sector, where refrigeration breakdown coverage is provided by both the carrier’s motor truck cargo (MTC) legal liability policy and our insured’s contingent cargo policy. Sounds okay doesn’t it? Well, it is not. When the driver sets the temperature wrong and the freight is rejected, the carrier’s MTC policy does not respond as there was no refrigeration breakdown, and the same holds true for the insured as their contingent cargo coverage does not respond for the same reason. Is the broker still liable to the shipper per the broker carrier agreement? You bet. DIC did not respond here. What about cases where the insured is not told the full value of the load by the shipper; the insured is responsible contractually to the shipper for cargo loss and claim, and it turns out the loss was $150,000, but the carrier only has $100,000 in limits and the insured has a $250,000 limit on your contingent cargo policy. All good here to pay the difference right? Wrong. All contingent cargo policies require the insured to require the carrier to provide a COI for the value of the load. Absent of that, coverage does not trigger. So the insured will be left to fund $50,000. That cannot happen often or the insured is out of business.

6) Discussion of Freight Broker Claims Handling Practices

Another issue that is problematic is claims handling, By the time the loss gets to the contingent cargo insurer, everyone is unhappy that the claim has not been paid. And the claim may have not triggered contingent cargo coverage yet. There may not have been formal denial by the carrier or the carrier’s MTC insurer that the claim has been denied. It was noted that a customary part of freight broker services to their shipper customer is claims remediation services. That is natural, since the broker placed the load with the carrier, vetted the carrier, has a broker-carrier agreement with the carrier, has a certificate of insurance from that carrier’s insurance agent, it makes sense that they help in the loss. But the insured’s contingent cargo insurer may not be working on the same basis as the insured to remediate the claim, especially if coverage has not been triggered.

Note it is worth saying that contingent cargo pays plenty of freight cargo claims where the carrier’s insurance company has denied the loss. With that said, based on the aforementioned analysis, it is not a perfect solution. While it is inexpensive relative to cargo or shippers interest coverage, an insured can be left without assurance (in the event of denial of a MTC claim by the carrier’s insurer) that their contingent cargo insurance is going to show up. Again, we see most of our competition writing contingent cargo that doesn’t pay for contingent cargo claims. We, at GTU, want our insurance companies to be there for our insureds, but it cries for a better insurance product.

7) Coverage Solutions- Primary Cargo Coverage for Freight Brokers

So who is doing it well and what is a solution? Probably the best insurance company we see in our space handling cargo loss is our TT Club package program. TT Club is an odd company that provides an indemnification solution to all its lines of coverage (as opposed to a pay on behalf situation). Why does this work? As previously mentioned the insured needs to be a part of the claims solution and provide the customer service and attention needed to fulfill the promise of good service, which is what freight/truck brokers sell. So TT Club works with the insured through the claims process, mitigates loss, and then reimburses the insured less the deductible for the loss. But that is not the biggest issue. The most important aspect is coverage is Primary Cargo Coverage. Do not get me wrong, TT Club hopes, like any contingent cargo insurer would, that the carrier or the carrier’s insurance will step up and pay the loss. But if there is a problem, they immediately allow the insured to step in on a Primary Basis. That saves the freight/truck broker’s relationship with the shipper. They will, like any insurer, require an exhaustion of recourse against the carrier, but will indemnify for loss and then subrogate back against the carrier and/or the carrier’s MTC insurer. That is what is needed. So again, even though the insured is not legally liable as a freight broker, they are legally liable by contract (almost like a freight forwarder). They have a Primary responsibility to the shipper which is why Primary Cargo is needed.

So if TT Club is doing it well, why is there the need for another insurer in this space? Well, with our friends at Hudson Excess Insurance Company, there is an opportunity to make a good product better. So we are pleased to announce Hudson’s Primary Cargo Coverage which will offer other perks in consideration of the package policy that other insurance companies cannot offer.  One of the shortcomings of TT Club is that defense is covered within the limit so it becomes a “wasting limit” policy. With Hudson, defense is outside the limit which is an obvious benefit. What else? Hudson will offer the same indemnification primary cargo insurance, allowing the insured to assist in settling claims and then be indemnified. But the other coverages that Hudson offers will be on a “Pay On Behalf” basis. We think this is better in that aside from the aspect of defense that this again in addition to the limit. Also, if there is an unfortunate catastrophe bodily injury claim, the insured is much better off not being on an indemnity basis. So Hudson has given the industry what we feel is needed and married insurance programs that offer the best of both worlds.

So what about coverage?

8) Freight Broker Primary Coverage Explained

The normal coverages are provided like defense and approved recovery and mitigation expenses. In addition to that, coverage is provided for claims that are normally not covered such as claims caused by non-compliance with the US Food and Drug Regulations relative to food transport and temperature change. How about broken seal coverage (a claim that must be turned in promptly)? Covered. How about exclusions? Does it exclude carrier employee fidelity? Nope. How about excluding refrigeration breakdown or the driver simply set the wrong temperature? Nope. Or unattended auto? Nope. Or imposter theft? Nope. Are there commodity exclusions? Very limited commodity exclusions. How about wetness excluded? Nope. Coverage for adulteration? Yep.

Is it more expensive? You bet. The loss cost of not excluding everything that ends up being denied by contingent cargo makes it necessary to get more premium. But it is what the insured needs. Note that many shippers (we understand Walmart is one of them) are requiring primary cargo coverage versus contingent. They are requiring their freight/truck brokers to have the primary insurance responsibility within the contract. Hudson Primary Cargo offers the insured the opportunity to be the value added they need to be to their shipper customers while still offering the necessary pay as you go on other lines.

Is Hudson Primary Cargo perfect and could claims and losses still be denied? Sure. But it is the best product we have seen when writing all the necessary freight brokerage coverages.

So what else is needed to get a quote for Hudson Primary Cargo? Unlike Contingent Cargo which is written just on revenues, we need the following:

9) Primary Cargo Supplemental Underwriting Information Required

  • Complete financials. Audited financials get a premium credit (note we can indicate but we cannot quote without complete financials)
  • Shipper list
  • Commodity List and the percentages of each commodity hauled
  • Average and maximum value by commodity
  • Largest shipper contract

With that, GTU will be able to get you what the insured needs. We hope you and your insured will appreciate the Hudson Primary Cargo Coverage for our Logistics insureds.

One final note, unlike the rest of the marketplace, GTU will offer the options of contingent cargo and primary cargo going forward when it makes sense. So it gives the insured the option to either look at lower premium or better coverage. We will always be an advocate for better coverage. It is simply what the industry needs and presently does not have.

Cyber Insurance and Risk Management 101 for Truck Brokers

On December 25th, 2020, a deranged man parked his recreational vehicle on 2nd Avenue downtown in Nashville, Tennessee in front of the AT & T building. Obviously troubled, he decided to create a huge blast from his vehicle that in essence blew up the street (along with himself). No one knows yet if it was an act of terrorism or something else, but it wreaked havoc in a town already hard hit by Covid, a prior tornado, and other negatives. All that said, we will get through it and resilience is part of our collective American fabric.

That said, some have surmised that the bomb was intended to knock out AT & T- and it did just that. Not only was AT & T’s internet and phones down, it closed all downtown access and flights were canceled at Metropolitan Nashville’s International Airport.

And our personal internet was down. And it was out for days. Now I am one of those guys who can use his computer and telephone with some aptitude and dexterity- yet I am so often humbled by having to ask my daughter how to do something technical that usually turns out to be rudimentary.  I do not Facebook or Twitter and if I can get one less email in my life, it is a victory.

But I can tell you with the internet down for days and we Americans being tethered to a technological life of Smartphones and laptops, it was damn inconvenient, and it made you wonder how you ever lived a life unplugged at all.

At GTU, my friend and business partner has created a “tricked out” operation with assistance from our capable and innovative IT manager. As an agency principal in the Logistics Underwriting unit, I need to be able to count on that we are effectively backstopped to our internet from going out or worse being attacked. Since I run the Logistics Underwriting Practice at GTU, my job is to underwrite and grow the business. That cannot be done without technology.

I feel we at GTU understand the risks facing logistics in general and truck brokers specifically. We have worked to write state-of-the-art industry leading insurance policies, and we also offer necessary and often-required risk management assistance to the $250 billion logistics industry. In the Covid economy, logistics is not only growing but also becoming a bigger part of American lives- involved in the 24/7/365 transportation of essential goods and now vaccines.

Markel Insurance has been a very good underwriting partner, and they asked me if I would be interested in underwriting and selling Cyber coverage.  I said yes.  I knew of instances of freight brokers and 3PLs being ransomed. On a bigger picture basis, I knew that Microsoft had source codes stolen by the Russians. So Cyber-attacks are happening daily. I told Markel I was concerned that Cyber Insurance has become ubiquitous in that everyone has a product, and most folks do not know what it does and does not cover, why they need it, or the language of Cyber and technology. Markel agreed and has packaged it with their professional liability coverage.

Most freight brokers have sophisticated hardware and software along with very good transportation management software (TMS). In fact, most freight brokers could not operate without their TMS. Also, many sales are generated through load boards ( e.g. Truckstop.com) and the freight broker is on-line all day every day. Suffice it to say, a freight broker cannot exist without technology- and that is the essence of what Cyber insurance covers.

My goal is to advise you what the cyber language is, what it covers, and then give the non-tech CFO the terminology that his or her team needs to be able to understand the language- and it’s a daunting language.

With Markel there are 4 coverages applicable to freight brokers (out of 6 total coverages) and it is important to learn the terminology. Let’s discuss what they are and why a truck broker needs this coverage.

  1. Network and Information Security Liability– protects against risks associated with the failure to protect electronic data containing others’ private information, the inadvertent transmission of a computer virus, the inability of authorized users to access your website or computer network, and failure to notify the appropriate party.  A truck broker faces all these issues every day.
  2. Network Security Loss- covers your business in the event of network security failure; which can include a data breach, malware infection, cyber extortion demand, ransomware, or business email compromise. Network security coverage includes first-party costs––expenses that you incur directly as a result of the cyber incident. The biggest component of coverage is Business Interruption Loss. This is the “meat” of coverage and this type of claim or loss is happening every day to truck brokers.
  3. Breach Mitigation Expense– provides coverage for expenses  incurred by the Named Insured with the prior written consent of the Company for: (a) The services of a public relations professional, or other publicity expenses that are recommended by a public relations professional to respond to any actual adverse publicity in the media. A smart product to offer in conjunction with any data breach
  4. Social Engineering Loss- Social engineering fraud (SEF) happens when a cybercriminal purports to be a trusted individual in order to deceive people into releasing confidential, personal information, money or other property. For example, a fund office or finance department of an organization is the victim of SEF when an employee acting in good faith transfers money to a third party in response to fraudulent instructions in an email. The email is sent by a cybercriminal impersonating an individual who has the authority to request the transfer. This is happening daily to truck brokers

This is smart to offer your logistics customers. And you do not want to get a call on a Cyber loss and then tell them they do not have coverage. The other issue is that no one knows the loss cost on Cyber coverage for freight broker. It is one of the things the insurance industry is working diligently toward understanding. Frankly, unlike Covid where the business interruption/loss of earnings remains largely uninsured (as there was not a direct property loss), this is one of the times the insurance industry has stepped up to say we are here for you- a good thing to see.

Rather than take my word for it, take a look at some actual Cyber losses. By the way, I should have mentioned much earlier that Cyber coverage is the same as Data Breach Coverage. Rather than spell out some Cyber Data Breach losses, I thought it might help you to hit the links on some actual claims on logistics operations:

But Markel, like most insurance companies, wants to insure operations that are working to mitigate or prevent cyber losses. So they want to see a risk management approach to Cyber Data Breach losses. But if you are freight broker, you need to understand the terminology so you can discuss same with your staff. Once you understand the terminology, then we can discuss a prudent risk management strategy:

Glossary of IT Terms used for Cyber coverage:

  • IT- IT stands for information technology and is the department within a company that is charged with establishing, monitoring and maintaining information technology systems and services
  • Firewall- a firewall is a network security device that monitors incoming and outgoing network traffic and decides which specific traffic to let through based on a defined set of security rules. Firewalls are the first line of defense in network security and can be hardware, software or both.
  • Cyber- the culture of computers and information technology
  • Cyber Insurance- specialty lines insurance product intended to protect businesses, and individuals providing services for such businesses, from Internet-based risks, and more generally from risks relating to information technology infrastructure, information privacy, information governance liability, and activities related thereto. Risks of this nature are typically excluded from traditional commercial general liability policies or at least are not specifically defined in traditional insurance products.
  • Anti-Virus Software- software that is designed to detect and eliminate computer viruses. Effective Anti-virus software includes network intrusion prevention, centralized definition deployment and ransomware prevention modules.
  • Malware- Malware, short for malicious software, is a blanket term for viruses, worms, Trojans and other harmful computer programs hackers use to wreak destruction and gain access to sensitive information. Malware is a catch-all term to refer to any software designed to cause damage to a single computer, server, or computer network.” In other words, software is identified as malware based on its intended use, rather than a particular technique or technology used to build it. A virus is a type of malware, so all viruses are malware -but not every piece of malware is a virus).
  • Predominate Types of Malware:
  • Ransomware – Software deployed to encrypt critical files in an environment, Ransomware is accompanied by a ransom note requiring payment ranging from $500 to millions of dollars in order to decrypt the files to be used. Paying does not guarantee the files will get decrypted, and even if the perpetrator is paid, the act of encrypting/decrypting certain filetypes can result in them being corrupted and unusable afterwards.
  • Spyware – Used to gain access to information or systems without the end user’s knowledge – This usually leads to a monetary loss from stolen financial credentials or the deployment of ransom demands from exploiting captured user permissions to gather sensitive information or deploy ransomware.
  • Security Awareness Training- a formal process for educating employees about computer security. Employees should receive information about who to contact if they discover a security threat and be taught that data is a valuable corporate asset.
  • Electronic Funds Transfer- The electronic exchange (transfer of money from one bank account to another), either within a single financial institution or across multiple institutions, through computer-based systems. Wire transfers and ACH payments are examples of EFTs.
  • System Backup- the process of backing up the operating system, files and system-specific useful/essential data. Backup is a process in which the state, files and data of a computer system are duplicated to be used as a backup or data substitute when the primary system data is corrupted, deleted or lost.

Now you know how to define or discuss Cyber Insurance and you can now teach your people the information in layman’s terms.

The logistics insured wants freight broker coverage and also wants to prevent, to the extent they can, cyber data breach losses. Our IT manager here at GTU has an excellent pedigree in the cyber security game, having worked for a national firm, specifically in the cyber security business. Here is what he advises:

  1. Develop a Managed Firewall strategy with an IT Expert- Depending on size of business, along with the applications they use and type of data being handled, a typical office of 10 employees or less an adequate firewall and a tech expert to program it should run in the $600 to $2,000 range. Just buying firewall software probably won’t get the job done.
  2. Consider a Managed Service Provider (MSP). An MSP serves as a company’s outsourced IT department. It can be much better solution than having your own IT person paid in the 30 to 40k range. A MSP seldom saves money- but having access to real engineers is a game changer for a company that cannot afford corporate grade talent in house
  3. Buy Antivirus, Anti-Spyware and Anti-malware (they are all the same product). We recommend any paid product with network intrusion detection.
  4. Develop a System backup procedure. This all depends on the hardware and software you have and typically all vendors will have advice on how that system back-up should happen.
  5. Requiring 2 signatures for a wire transfer. An easy solution that a bank can help you with.
  6. Implement Dual Factor authentication on any critical services (specific systems with sensitive information or bank accounts) – If a password is compromised, a perpetrator would still not be able to get in.

All that being said, I suggest that everyone consult with a tech expert for an individualized tech, cyber, and data breach risk management plan- as it is their forte.

For Logistics operations to grow, Cyber coverage will become the norm rather than the exception and we have seen some shipper contracts actually require the freight broker to have same. And having a Cyber/ Data Breach risk management plan will be very necessary too. By being the first to offer Cyber Data Breach coverage to our logistics customers in the package, we hope to help protect their future, and keep the industry growing. GTU is ready to help you.

Update – Game Changer Case Decision- Miller versus CH Robinson- The Case Against Preemption

We just got an update on this decision from our friends at Frilot (freight brokerage industry and insurance leading claims TPA concerning the recent US Supreme Court decision not to hear this case. (It had been appealed to the US Supreme Court).

What is the upshot here?

  • The use of the defense of preemption is effectively gone in the states of Arizona, California, Idaho, Nevada, Oregon and Washington.
  • In these jurisdictions, the defense strategy will necessitate the freight broker going through discovery and adjudicating the claim relative to both vicarious liability and independent negligence statutes.
  • Intrastate moves are not applicable to this new development and there is no safety exception for intrastate moves.
  • Services can still be preempted which is applicable to cargo claims.
  • Claims outside of these states (the 9th circuit) are the same as before and the good fight continues.
  • Carrier selection by freight brokers has been and will continue to be a very big deal and will be scrutinized by courtrooms going forward.

Below was the original communication on this subject:

My friends at Frilot (Industry leading claims TPA) sent me the following:

“On Tuesday, September 29, 2020, a panel of three judges in the United States Ninth Circuit Court of Appeals issued a ruling in the case styled Miller v. C.H. Robinson Worldwide, Inc., No. 19-15981 (9th Cir. 2020), overturning the availability of preemption as a statutory defense to third party claims of freight broker negligence in personal injury cases.”

This is a big deal in that, while Preemption does not work in every jurisdiction, it has been one of the common defense strategies for defending a truck broker in personal injury claims. So defense attorneys’ first order of business is trying to get a case removed to federal court. So what is the deal with Preemption?

Per Frilot, ““Preemption” is a legal concept that is rooted in the idea that while individual States maintain a certain degree of sovereignty, the federal government has the ability to displace state laws in favor of a federal law if a single cohesive law will better serve the nation in its entirety. In the freight broker and trucking context, Congress exercised this “supremacy” power of the federal government over States in order to deregulate both industries and thereby created a set of laws at the federal level that applies to freight brokers. “

Further specific Federal Preemption Defense applicable to Freight Brokers peculiarly comes from the Federal Aviation Administration Authorization Act ( the FAAAA) which provides that:

(1) A state may not enforce a law, regulation, or provision related to a price route or service of any motor carrier, broker or freight forwarder with respect to the transportation of property

(2) BUT the Safety Authority of a state will be a matter not covered with respect to motor vehicles (this is known as the Safety Exemption).

You will note that there is both confusion and consternation concerning how freight brokers are intertwined with motor carriers in (2) above. So the issue is does Preemption work for freight brokers even with the safety exemption? The answer has been yes and no.

Well leave it to CH Robinson to again lose an important case. The 9th Circuit Court of Appeals, the highest court to review and decide on a freight broker personal injury case ( that is what Miller versus CH Robinson is where the plaintiff was left a quadriplegic by the carrier that CH Robinson hired. In a 2-1 ruling that per Frilot “The Court did not believe that Congress intended to immunize freight brokers from liability for the negligent selection of motor carriers. Further, the Court found that even if Congress intended the reach of the FAAAA to be beyond mere economics, the “safety exception” was intended to act as a safeguard that would allow States to regulate brokers through state tort law.”

Note the upshot is that a major battle has been lost- and that does not bode well for freight brokers. And while this is only one district order, this case now becomes the gold standard for cases against freight brokers.

Specifically, based on the 9th District, this case will serve as a binding precedent for the states of AZ, CA, ID, MT, NV, OR, and WA ( and a few other territories and states that are not pertinent) relative to Interstate Shipments.

So what is the impact of this case from a defense, tort and insurance perspective?

  • There will need to be a different decision in another district court. Right now the 6th circuit has one. If it rules the same, it will make the defense road that much harder.
  • As safety in carrier selection is not preempted, the bar will be raised on carrier selection and plaintiff attorneys will work harder to show negligent hiring and negligent selection- notwithstanding trying to encourage success from the broker being vicariously liable.
  • The pervasive issue of a broker acting like a carrier ( or worse being construed to be a carrier) will become a greater issue as well.
  • The Miller case supports the notion of higher loss cost ( more claims) for freight brokers and their insurance carriers.
  • So is there any good news about this decision? The answer is unfortunately no.

    Frequently asked questions when completing Logistics Insurance Applications

    It is important for everyone to not only know the answers to these questions but also understand the WHY those questions are being asked:

    What is an affiliated entity and why do insurers need to know if we are brokering loads to an affiliated entity?

    Answer:  An Affiliated Entity is any other trucking, freight brokerage, freight forwarding or transportation entity that has common ownership with the insured. Typically losses are excluded for loads being brokered to affiliated entities– as they have their own coverage. Specifically a trucking company is required to indemnify the freight broker for any and all losses.

    Why do insurers need to know the Total Gross Billed to Shippers – ($ Revenue) and not the net revenue?

    Answer:  Policies are rated on gross revenue as reported on financials, not net revenue (which is unacceptable). A freight broker typically earns 10 – 20% of the gross load value and insurance policies are rated on a gross basis, not a net basis. Reporting the net revenue would cause a policy to be miscalculated.

    What is the difference between Truck Broker Liability (TBL) versus Contingent Auto Liability (CAL)?

    Answer: TBL coverage is primary coverage protecting the truck broker. CAL coverage is contingent coverage predicated on the carrier or the carrier’s insurance not paying or responding, and thereby triggering coverage. TBL is the best industry coverage. More information is available on another post shown here: 

    Why do insurance applications ask for the current premium?

    Answer: To save time and to make certain that a competitive offer is available. Insurance companies would like to win your business. Success rates for finding quality insurance are higher when current premium information is available. Many insurance companies require this information.

    Why is the application asking if we fine carriers?

    Answer:  Fining carriers that do not follow FMCSA guidelines could result in adverse judgements and higher insurance claims payout. Fines indicate control and therefore implied responsibility. It is better to not do business with a carrier that does not follow FMCSA guidelines then to impose fines.

    The Differences Between Truck Broker Liability and Contingent Auto Liability

    We are asked nearly every day to describe the differences between Truck Broker Liability coverage (TBL) and Contingent Auto Liability coverage (CAL). To understand the differences, it is important to look at the history of coverage for truck brokers.

    History of Coverage

    Heretofore, there was only Contingent Auto Liability with one exception, the AIG program of Primary Truck Broker Liability (TBL) – an unprofitable program that has now shut down. That program evolved out of the need to insure truck brokers on a primary basis- as many producing agents in the insurance marketplace felt the conventional CAL programs did not offer comprehensive coverage. The problem with the AIG program was that it was only designed for the largest truck brokers and the minimum premium was too expensive for the average sized truck broker to consider. Also, many shippers required additional insureds and waivers of subrogation, along with primary and non-contributory wording, which AIG was not willing to offer.

    That changed with the Markel TBL program designed for all truck brokers. Now there are both Hudson and Beazley programs that offer TBL as well. These are the only three mainstream TBL programs in the marketplace. TBL coverage is more important today as shipper’s demands on both truckers and truck brokers have changed. Shippers have gotten much more educated relative to coverages and they want a truck broker to have several things:

    ♦     to have primary coverage

    ♦     to add the shipper as an additional insured

    ♦     to defend and indemnify the insured (and the shipper if named as an additional insured) irrespective if the trucker’s coverage defended/indemnified or not

    ♦     to waive subrogation

    Discussion

    Are CAL programs as worthless as the marketplace thinks they are? Absolutely not.

    Is CAL coverage as good as TBL coverage? Absolutely not.

    Let’s look at some of the differences:

    ♦     CAL – Covers damages resulting from auto liability that may arise on a contingent basis. That is, it will cover the broker if the carrier’s primary auto liability coverage fails to cover a claim.

    ♦     TBL – Covers bodily injury or property damage resulting from the ownership maintenance and use of a carrier’s auto arising out of and emanating from the insured’s operations as a transportation broker.

    Note the TBL does not mention being contingent and is therefore primary coverage (a very big deal). The coverage form is a hybrid policy (GL & Auto) covering a truck broker’s liability arising out of an auto claim on behalf of a trucker to whom the insured brokers. The TBL’s wording comes straight out of an ISO commercial auto policy.

    The major differences are the specific conditions that could negate coverage for an insured under the CAL policy that are not present in the TBL policy:

    ♦     Defense/Duty to Defend- Both programs have a duty to defend, but the CAL will not defend if there is other valid insurance. So a truck broker could be sued and not defended if the trucker’s coverage is providing defense. A big deal.

    ♦     Punitive and Exemplary Damages- Excluded under the CAL and not under the TBL (some smaller accounts are endorsed to have an exclusion for same).

    ♦     Annual Aggregate- CAL has an annual aggregate (which is the most the insurer will pay during a policy period). The TBL is like an auto policy and has no annual aggregate (some smaller accounts are endorsed to add aggregate limits).

    Agent’s Duty

    We are all in the business of trying to sell the best coverage to protect the insured. In the past, when there was only CAL, there was no other choice in coverage. It now makes sense to offer TBL coverage if a prospective insured meets risk acceptability and best practices standards. Note as more and more shippers become aware that this coverage is now available, TBL coverage will help truck brokers meet risk acceptability standards with new shippers.

    Professional Liability Insurance for Truck Brokers- Why They Need It and Coverage Intentions

    Professional Liability is a very interesting insurance product that has recently received much more notice for truck brokers. Which raises the question: why would a truck broker need Professional Liability coverage when it is not offered for truckers? In my view, we will eventually see truckers required to have Professional Liability. But let’s not get the trailer in front of the tractor….

    First, let’s go back to what coverages truck brokers are buying today (in order of popularity):

    ·    Broker Bond for $75,000.

    ·  Contingent Cargo- most look for coverage that includes excess, difference in conditions and sublimits for Identity Theft and Earned Freight.

    ·  Truck Broker Liability- this provides primary coverage versus contingent auto coverage for best practices brokers. Most brokers need and many shippers require this coverage.

    ·  General Liability- this is for premises and incidental exposures normal to truck broker operations.

    So why the sudden need for Professional Liability? Both shippers and truck brokers have figured out that, while there has been a vast improvement over the years, truck broker insurance coverage is still in its early days- meaning that the case precedents against truck brokers have not been completely assessed, examined or assimilated in the marketplace. In reviewing the aforementioned coverages, we will then be able to identify the coverage gaps that Professional Liability can fill. Contingent Cargo covers the property or cargo loss that results from the failure of the trucker’s policy to provide coverage. Truck Broker Liability covers the legal liability of the broker for bodily injury, property damage, and pollution for negligence in the supply chain. General Liability covers the premises and can include miscellaneous operations like sales out of the office.

    So here is the gap. Could a truck broker be legally liable for a loss that does not result in bodily injury, property damage, or pollution that is not covered in a TBL or GL policy? Could a truck broker be liable for financial loss that is not the property of others? You bet.

    A Professional Liability policy covers errors and omissions that are committed during the course of a truck broker’s business day. A truck broker may make mistakes while undertaking their work (overlook a critical piece of information, incorrectly state a fact, etc.) and could be sued by their clients. The fact that a truck broker is in essence a middleman between the shipper and the carrier can create a completely different exposure than for a carrier dealing directly with a shipper. To be more specific, a truck broker needs Professional Liability coverage to cover the following exposures:

    ·  Misdelivery- the truck broker instructed the carrier to deliver the goods to the wrong place.

    ·  Miscommunication- the truck broker told the consignee the load would be delivered on Thursday when he meant Tuesday.

    ·  Regulatory Errors- the truck broker did not know the rules and the load was impounded by a civil authority.

    ·  Discrimination- the truck broker was seen to discriminate against a long standing carrier in favor of another one.

    ·  Negligent Hiring- the truck broker hired an incompetent carrier whose deficiencies resulted in financial loss other than bodily injury, property damage or loss of cargo.

    ·  Negligent Acts

    ·  Negligent Omissions

    Although we at GTU are able to sell the only three occurrence forms in the marketplace, most Professional Liability coverage forms are claims-made. Deficient programs only offer coverage on claims-made & reported versus pure claims-made. GTU not only offers claims-made and occurrence coverage, but can also cover punitive damages (where permissible by law), personal injury, disciplinary proceedings, loss of earnings and expense reimbursements.

    Aside from normal policy terms and conditions and exclusions, it is important to understand that a Professional Liability policy does not cover:

    ·  The cargo or property lost or damaged in transit (that’s what Contingent Cargo policies are for).

    ·  Bodily injury or property damage (that is what the TBL and GL policies are for).

    One last fact to know when dealing with a prospective truck broker. The truck broker business is thriving and averaging 15-20% pretax profit. So if you have a broker doing $5 million in revenue, he is making usually $750,000 to $1 million. If they have any retained earnings, their business is worth way, way more than that pretax profit. So when you are discussing something that seems as insignificant as Professional Liability, the question is: if your business is worth as much as the average truck broker, why would you not have Professional Liability coverage that may pick up the coverage gap?

    We hope this offers a clear overview of Professional Liability coverage. Don’t have an E&O by failing to sell Truck Broker Professional Liability/E&O coverage.

    Truck Broker Carrier Selection and Carrier’s Insurance Issues with AM Best Rating

    We are asked all the time to assist in evaluating carrier quality. While the process can be both tedious, exacting, and time consuming, all stakeholders understand that legal liability has, can and will be determined in a courtroom based on the salient issues of negligent hiring, negligent entrustment and vicarious liability as it relates to a truck brokers selection of carriers to haul their customer’s loads. Nobody (or I should say nobody with any sense or anyone looking at any case law) disagrees with this notion.

    GTU and its insurance company partners provide free risk management software in carrier selection. The idea serves 2 interests. First, it helps GTU assess the pool of carriers a truck broker uses and identify the carriers that can optimize the risk management characteristics that a truck broker’s customers both need and expect. It is not often said, but at the end of the day, the value a truck broker brings to its customer is the carrier quality used. And some of their shipper customers would be very disappointed in some of the choices made in carrier selection- that they would never choose themselves if they were hiring the carrier directly.

    Secondly, the truck broker is served by optimizing the placement of loads with the carriers that represent a better risk management profile.

    While carrier DOT Safety Ratings are a fairly black and white issue relative to carrier vetting(we suggest forgoing carriers with a conditional or unsatisfactory DOT Safety Rating), CSA equivalent assessment is a much more dynamic process. At issue is the data. Roughly 75-80% of the carriers have no relevant data so using CSA equivalents in the process is more problematic. That said, less than 4% of the carriers have 2 or more Alerts so that should tell a truck broker to go get the 96% that do not have these inspection problems that can and have been used in a courtroom.

    A bigger issue is the carrier insurance AM Best (Best) ratings. The Best rating relates to the financial stability of the insurance company in both key ratios and capital size. Again the data is relevant . Note 16% of the carriers have insurance with a carrier that is less than A-rated. That’s right, just 16% which means 84% of carriers have insurance with Best A-rated insurance. So again why would a truck broker use an carrier with insurance less than an A rating? As far as  the truck broker is concerned, it typically has to do with the cost of moving the freight or finding a carrier at all. And that is a poor answer.

    What is more perplexing is that if the shipper customer was aware that a truck broker was using a carrier with less than Best A-rated insurance, they would not use that truck broker at all. We see contracts from the shipper that require the broker to use carriers with A-rated insurance- only to not know that truck broker is not honoring those contract terms.

    So what is the deal with A-rated insurance? Best confused the issue as well by denoting that a B++ rating is Very Good as far as their rating standards. That said, all insurance agents know that is not the case. And while some will sell poorly Best rated insurance carriers, most of the agents errors and omissions coverage excludes loss and financial insolvency issues that go along with it when using less than Best  A-rated carriers.

    What adds gas to the fire is that most excess insurers will not write over less than A-rated insurance, and most trucking insurance agents would state, albeit subjectively, that placement with a carrier that is less than Best A-rated is a sign that the carrier has loss problems or other issues making it less than a stellar carrier. And with A-rated insurance being plentiful( think 84% of the carriers with Best A-rated insurance again), a truck broker should select those carriers.

    There are exceptions in this marketplace that are worth noting. Many of the insurance companies that have been downgraded to less than Best A-rated have paid other insurance companies to assume their liability or utilize a cut-through endorsement. As underwriters, we think this is both prudent and should be acceptable to all stakeholders. But why would we make this exception?

    An Assumption of Liability Endorsement means an insurance company has assumed the liability of the ceding company. So if XYZ Insurance Company is B rated and has had ABC company which is A-rated assume its liability, you in essence have 2 insurance companies on the risk where one of them is A-rated -not a bad solution. The same holds true where a “Cut Through” endorsement has been issued. A Cut Through allows in the case of XYZ’s insolvency that an insured will have access to the assets of ABC- again not a bad situation.

    In closing, managing carriers along with their insurance company’s financial rating/ Best rating is a fundamental part of risk management. Our business and the truck broker’s business is getting more scientific in risk management and risk mitigation. At GTU, we include this service as a free benefit to insurance placement, so it is a “why not” for the truck broker. And it can save a truck broker’s bacon so to speak in a courtroom. So do it.