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September 4, 2010

A Discussion on Non-trucking Liability

Summary: Truckers and trucking companies usually have insurance coverage for their risk exposures through the use of some commercial auto insurance policy; for example, the business auto coverage form, CA 00 01 03 10; the truckers coverage form, CA 00 12 03 06; or the motor carrier coverage form, CA 00 20 03 10. These policies apply to sums that an insured legally must pay as damages for bodily injury or property damage due to an accident, and resulting from the ownership, maintenance, or use of a covered auto; these policies can be written in the name of the transportation company or the individual trucker that owns the trucks.

A problem can arise, though, when a driver, driving under a lease agreement with a trucking company, engages in non-trucking activities, such as bobtailing or deadheading. The company will most probably object to extending its liability policy’s coverage to a trucker under these circumstances. This article will explore the meaning of “bobtail” and “deadhead”, and discuss insurance coverage issues.

Topics covered:

Introduction

Insurance coverage discussion

Court cases

Deadheading

Introduction

Bobtail operations are not defined on the truckers form or other standard commercial auto forms, even though the commercial lines manual (CLM) discusses such operations. The manual refers to bobtail operations as non-trucking usage, that is, when the vehicle is not rented or used for business purposes to carry property, or to haul someone else’s trailers. Or, as a court of appeals in Ohio —Roseberry v. Balboa Insurance Company, 627 N.E.2d 1062 (Ohio App. 1993)—put it, bobtailing is a “tractor without a trailer.” Another court in Royal Indemnity Company v. Providence Washington Insurance Company, 707 N.E.2d 425 (N.Y. 1998) said bobtail insurance is non-trucking insurance for “a tractor without an attached trailer, which is termed a bobtail.” So mainly, bobtailing refers to the time after the driver has delivered the load and is returning home, or to a time when the driver is not hauling property for a trucking company, with the main point being that the driver is driving without a trailer attached to his truck.

If a trucking company owns all the trucks and trailers used in its business, and has only its employees driving those owned vehicles, and never hires or leases independently owned vehicles, bobtailing (or deadheading) issues would not be a problem. After all, the truckers coverage form, CA 00 12, can be issued with “any auto” (symbol 41) or “owned autos” (symbol 42) as designated covered autos; and, the who is an insured clause considers the named insured an insured for any covered auto, and also includes as an insured anyone while using, with the permission of the named insured, a covered auto that the named insured owns, hires or borrows. So, CA 00 12 would provide coverage for the named insured and its drivers regardless of whether the driver was hauling cargo or driving the vehicle home after a delivery; there are no exclusions or conditions on CA 00 12 that would prevent such coverage. (For more information on the trucker policy, see Truckers Coverage Form; the truckers policy is analyzed on the Auto E.1 pages.) (Note that the truckers form, CA 00 12, is being withdrawn from use by ISO).

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