TT Club is an interesting company, and they have an interesting place in GTU and in the logistics marketplace. What you find in the logistics insurance marketplace is domestic insurance capacity and international insurance capacity. This is understandable in that freight moves both domestically and internationally and therefore the insurance needs to dovetail those exposures. As a British mutual insurance company, TT Club is both an anomaly and an exception to the alternative domestic stock insurers.
TT Club also has 3 interesting profit centers. They are the largest container insurer in the world. Also, they are a leading underwriter of port authorities all over the world. The profit center in the logistics space is Transport Operators. It is intended for non-asset-based intermediaries in the transportation sector. TT Club has done well in this segment, particularly with truck brokers, and they write half of the national accounts in logistics. GTU is delighted to write its share of national accounts with TT Club.
Logistics insurance, as a component of transportation insurance, needs to be able to address and cover the legal liabilities a transportation intermediary might have from both a regulatory basis and a contractual basis. Aside from the regulatory side which affects operational issues, the intermediary typically will have a contract requiring indemnity with their customer, the shipper and those contracts will have insurance requirements required of the intermediary.
While we deal with the many different components of transport operators in the intermediary space, our primary focus is freight brokers, also known as truck brokers. Their only required insurance with the FMCSA is a bond for $75,000. That said, the shipping world requires a multitude of coverages and we will address these coverages shortly.
Why GTU and TT Club? At GTU, we underwrite in-house and are program manager for roughly 80% of the risks we see. We have developed a proprietary carrier risk management algorithm that is all about having a defendable file in a courtroom situation where negligent hiring, negligent entrustment and vicarious liability are applicable. Also, we have a division at GTU that does logistics insurance all day every day. We know the business. TT Club uses GTU’s proprietary application and will offset the cost of our carrier selection software in their overall premium so that the risk management service is provided free. They allow GTU, as underwriter, to pre-underwrite all accounts to streamline and quicken the underwriting process. Finally, we have arranged 25 million in capacity over TT Club which is the most capacity in the marketplace.
So what coverages does TT Club write under its Transport Operators form and why are they better than the general insurance marketplace for freight/truck brokers?
● Cargo Liabilities- insures for claims for physical loss or damage to cargo arising from freight/truck brokers operations. This occurs when a truck broker has arranged transportation of cargo with a carrier or railroad. If declared, TT Club can even do ocean and air exposures. Once there is an established liability on the insured has assumed on behalf of the carrier or railroad, TT Club’s coverage will respond when the carrier or railroad or their insurer have failed to respond. While TT Club, like any insurer, hopes the carrier, railroad or their insurer responds first, TT Club’s coverage will respond on a primary basis when such agreement to provide primary cargo coverage has been made with the shipper customer. Note coverage is also offered for consequential loss. So, the primary component and the consequential loss component are the main sales points. Valuable cargo coverage can be included if declared but is typically covered at a lower limit. Exceptions apply to this as TT Club is not looking to have a transport operator not be insured adequately.
● Errors and Omissions- insures for claims for financial loss to an insured’s shipper customer. This is a result of an insured failing to perform certain obligations. Examples include delay where the insured told the carrier to deliver the cargo to the wrong address. Also, the insured may have told the carrier to set the refrigeration unit at the wrong temperature- resulting in rejection of the load. While many insurers offer professional liability, we can only think of one other insurer who offers coverage on an occurrence basis- as most coverages are claims made in the insurance marketplace. As any professional insurance agent is aware, a professional liability loss can occur after the policy expired, so TT Club correctly views that Cargo Liability and Professional Liability are coverages that should be written together- as both coverages serve to benefit the insured in their relationship with their shipper customer.
● Third Party Liability- the most important coverage in our view in that there have been 8-figure court judgments against freight/truck brokers. TT Club’s coverage indemnifies for the insured’s legal liability to a third party for bodily injury, property damage, and sudden and accidental pollution. Their coverage is succinct and unless endorsed does not warrant that the insured has obtained a $1 million commercial auto liability certificate of insurance from the carrier’s agent (although they certainly would expect the insured to have obtained same). TT Club also includes consequential loss which most insurers exclude. Their coverage is succinct and unlike contingent auto insurers where loss is just limited to auto, it can include other conveyances like rail, air and ocean. Add consequential loss and the lack of it being contingent coverage with the ability to get $30 million in limits through GTU (5 million in primary through TT Club and $25 million excess through Lloyds/GTU), it is one of the insurance industry’s leading coverages. In an effort to assist their customers, TT Club will endorse hired and non-owned coverage ( non- ISO) and certain GL coverages such as Fire Legal Liability and Advertising injury if requested.
● Fines and Duties- this is more an ancillary coverage and should be viewed as peripheral and more applicable to freight forwarders (which GTU places with TT Club). Coverage is provided for an imposition by authority (government) of fines due to a breach in regulations and rules because of services performed by the insured. Note the TT Club advantage is most insurers exclude fines in their coverage forms.
● Costs- this also is more an ancillary coverage and should be viewed as peripheral and more applicable to freight forwarders. Provides coverage for the insured’s additional costs incurred for claims mitigation such as expediting expense (getting the cargo in a claim to the intended destination. It also includes defense and disposal, cleanup costs, salvage, and in some cases uncollected cargo costs (typically at sublimits). Note most logistics insurers do not provide such coverage in their policy forms.
● Discretionary Insurance- this is about the oddest coverage we have ever seen offered. What is great is that it shows TT Club’s superior overall coverage intentions. TT Club can and may decide to reimburse an insured at their sole discretion to cover a loss outside of the other coverages. We have seen no other insurer offer this coverage intention- anywhere. So, if they feel it should be covered and for some reason it isn’t, they may indemnify and insured.
For an additional premium, TT Club also can offer coverage for liabilities arising from:
● Handling Equipment
● Carrying Equipment
● Chassis Liability
● Tenants & Fire Legal Liability
● Personal Rights and Advertising Injury
● Property
● Business Interruption and Insured Damage
So, you can see TT Club has a special niche in the marketplace. GTU and TT Club together can offer something truly special with both best-in-class insurance and premier risk management. That is why we lead the industry. Let us lead it with you.