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What kind of insurance do I need for my trucking business?

Monday, October 24, 2016
What kind of insurance do I need for my trucking business?

Authored by Dennis Moynihan, Horton Risk Advisory Solutions

Trucking is inherently a high stakes, risky business. There’s billions of dollars in freight being moved every day and the industry touches almost every conceivable good before it reaches its final destination.

The trucking industry itself is on the verge of a major technological overhaul – and with that technology will come new risks and opportunities.

Typically, a trucking company will only insure for these lines of coverage: Auto Liability, Auto Physical Damage, Cargo, and General Liability. This brief article is meant to go over a growing risk exposure in the industry that is often overlooked – Cyber Liability.

Three Reasons Trucking/Transportation/Logistics Firms Should have Cyber Insurance

  1. Money is constantly trading hands:

    If you have ever walked into a trucking companies’ or freight brokers’ office you will know that dispatch is on the phone 24/7 frantically trying to find and book loads. In this process, freight boards, load-matching software, and more importantly money are all trading hands. Just think about the implications of a cyber breach or attack if this process was shut down for an extended period of time. If hackers can shut down the New York Stock Exchange, they can surely penetrate any other digital marketplace. Also with the amount of propriety and personal information in these systems, huge exposure for a breach exists. Imagine if payment information, customer lists, driver info, vehicle info, or any other personal information were hacked or exposed. What would be the cost of that to your business? Simple examples such as MVR info on drivers being released without approval have had lawsuits settled for millions of dollars under the Fair Credit Reporting Act. What if all of your driver info was hacked and their personal info was made public?

  2. Cargo Theft:

    The bad guys are getting more sophisticated than ever. Instead of stealing physical trucks or trailers, thieves are now setting up fake companies, invoices, routes, etc. to steal freight. Imagine a $100,000 cargo loss due to a false shipment to a phony carrier. More business is done digitally than ever in the industry, and you now have to be extremely careful with who you transact with over the web.

  3. Driverless Cars/Trucks:

    It’s hard not to read an article on the industry today that does not feature something on driverless cars, vehicle safety, or accident avoidance systems. What if hackers were to infiltrate these new fleet management systems? It’s a scary thought to know that the possibility exists for hackers to reroute shipments, cause traffic accidents, or steal proprietary business information from these new emerging software systems. Who would be liable in a situation like that?

Now moving on from those grandiose “sales reasons” on why purchasing cyber insurance is important above, below are the cold hard facts why few companies purchase Cyber cover or are even aware of the exposure and risk.

3 Reasons No One Buys It

  1. Cyber is an intangible loss:

    Safety & Risk Managers can much better realize the importance of insurance when their new 2017 $150k tractor gets into a wreck or they have a truck roll over and $80k in cargo is lost. These are real tangible losses that have big consequences. Cyber is a different exposure. The loss can be purely intangible which is very different from such a capital intensive business model of the trucking industry.

  2. Trucking is an “old” industry where change is difficult:

    The average age of a truck driver is nearly 50 years old and there is nearly an estimated driver shortage of 75,000 drivers in 2016 as the industry struggles to attract and retain young talent. With that lack of turnover in the industry, the business model has remained relatively unchanged and the same insurance coverages such as Auto Liability, Physical Damage, Cargo, and General Liability are all the same. The industry is extremely large and complex and change is very hard because of that.

  3. Lack of knowledge or care from insurance brokers & agents:

    The workers comp insurance market size is $57B, the commercial auto market is $31B, and the Inland Marine (Cargo) market is $20B in the US. Contrasting, the Cyber market is estimated at only $2B in premium globally. Brokers and agents spend more time and devote more resources to the larger lines of coverage because that is where the majority of the premium is. A large amount of the risk exposure in the industry has gone uninsured as many companies have been left vulnerable with insufficient coverage or no coverage. It’s time for the insurance brokerage community to step up and address this issue.


Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.

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