Am I Covered When A Contract Driver Is Operating My Equipment?

If you have a leased vehicle or property, you are required to provide insurance protection for the owner of that unit from losses that you are legally liable to pay. Contingent Liability is protection from losses to a third party for which you are legally responsible but, as the owner of the equipment of property, may be named in a lawsuit.

It’s not uncommon for motor carriers to opt to add contractors instead of regular employee to their headcount, but what happens when a contractor is injured on the job? In these situations, workers compensation doesn’t apply, since they aren’t an employee of the business, yet you are dealing with an injury and losses. This is where contingency liability coverage steps in. This insurance protects the business from losses to a third party for which you are legally responsible but as the owner of your equipment or property may be named in a lawsuit.

What Is Contingent Liability Insurance?

Contingent liability insurance covers the insured business from losses due to errors and omissions of independent contractors. This can be particularly important if your subcontractors are making significant decisions that impact safety or quality. It may also be important to note that contingent liability does not protect an insured person against his own negligence; for example if he thought there was no ice but slipped anyway – then this policy won’t help him pay medical bills resulting from injuries sustained during the fall.

Who is Responsible to Purchase Contingent Liability Insurance?

Since contingent liability protects the business from losses to a third party for which you are legally responsible but, as the owner of your equipment or property may be named in a lawsuit, purchasing such coverage is the responsibility of the business owner or manager, not the contractor. If contingent liabilities exist, contingent liability insurance is required by law and should be purchased immediately upon execution of any contractual agreement with other parties.

What Does Contingent Liability Insurance Cover?

This policy can protect businesses against claims such as: – Bodily injury that occurs on the job site; – Errors and Omissions (E&O) legal defense costs; – Personal Injury Legal Costs; – Losses due to Third Party Property Damage; and more! As we mentioned above though contingent liability doesn’t offer coverage for negligence or errors made while performing work duties, so this policy will likely be part of a package policy you purchase as guided by your insurance agent.

How Much Liability Insurance Do I Need?

This will depend on what type of work your subcontractors provide and how much control over them you have; risks specific to each job should be considered as well. Generally speaking, contingent liability coverage of $500,000 per occurrence with aggregate limits up to $750,000 may offer enough protection for most small trucking businesses that do contracted work, however specialization by carriers or operators may require a greater per-occurrence and upper limit.

Take the Next Step

If you’re ready to take the next step in acquiring the appropriate types of liability insurance, contact one of our insurance agents to discuss the particulars of your business, loss history, and exposure, and they can put together a complete package policy to cover your business against loss or suit.