Protect Your Company Against Qualifying Unfit Carriers

Brokers and shippers must protect against the negligent qualifying of carriers and reduce their exposure to liability claims. Freight brokers are required to exercise reasonable care, or due diligence, when they qualify motor carriers. If a serious accident occurs while a load is being transported, a lawsuit could be filed against anyone who was involved in selecting the carrier.

It is essential that all brokerage entities establish, implement and maintain a sound carrier qualification process appropriate to their unique business. Once the procedure is in place, it must be strictly followed.

Baldwin & Lyons has identified the top 7 steps to protect your company against qualifying unfit carriers.

1. Although it may be tempting to overlook a trucking company’s record during expedited or rush assignments, completely analyze the safety fitness of your carriers to minimize the risk associated with negligent qualification.
2. Create or update your written corporate policy for qualifying carriers. Consider all available carrier safety performance data.
3. Ensure your corporate policy for qualifying carriers is understood and adhered to by everyone involved in the selection process.
4. Your carrier analyses should be based on a combination of safety ratings. Obtain carriers’ Safety Measurement System (SMS) BASIC scores, compliance ratings and other measurable data.
1. Do not qualify carriers with BASIC scores above or near the thresholds.
2. Do not select carriers with less than satisfactory carrier safety ratings.
3. You may access carriers’ safety information and ratings using the SAFER System Company Snapshot or directly search their monthly SMS results. Both sites require your company’s Department of Transportation (DOT) number or carrier name.
5. Maintain an up-to-date file for every carrier you use. Include information about insurance, authority, carrier safety ratings and SMS BASIC scores.
1. Request to become an Additional Named Insured and a Certificate Holder to be informed of any changes in carrier coverage.
2. Carefully review cargo insurance to ensure it is adequate. Specific inclusions in carriers’ policies could require your company’s participation in claim settlement.
6. Double check Department of Transportation (DOT) ratings before assigning a load to a carrier.
7. Particularly when considering new carriers, identify whether they have previously operated under different company names or MC numbers, and if they currently operate with any other MC numbers. Evaluate any available safety data for those operations as well.

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