WHAT SERVICES SHOULD YOU GET FROM YOUR INSURANCE?
CLAIMS — Obviously, the first and principal service you should get from your insurance provider is action and response when you have a claim. Unless the claim requires an immediate response – such as a major truck accident or major premises loss – you should gather all relevant information before sending in a claim report. You should report major claims as soon as possible.
Your insurance company should acknowledge the claim report within 24 to 48 hours; unless there is litigation, claims should be settled within 30 days.
COMPLIANCE – Your insurance provider should maintain all of your insurance-related filings – some filings are continuous, but others need to be made every year. Be sure to give complete and accurate information on all of your authorities so that correct information can be filed.
COVERAGE – Things that you need to insure may change during the term of your policy. If you purchase a new vehicle or a new location, there is a time period for reporting these changes. The time period can range from a few days, 90 days, or longer, so know what your insurance requires. If you don’t report changes within this “grace period”, there may be no coverage, or if items were deleted, you may not get the full credit.
LOSS CONTROL/SAFETY SERVICES — Some insurance companies can provide extensive help and information on how to reduce your exposure to claims; other insurance companies don’t offer any such services. If you want such help, ask what services are offered when you are reviewing annual premium quotations.
EXPERTISE – You should get the best service on all of these issues from an insurance provider that specializes in the moving & storage industry. If they don’t understand your questions, you may not have the best possible coverage.
STORAGE-IN-TRANSIT AND PERMANENT STORAGE
Lately I have been asked about Storage-In-Transit (SIT) and Permanent Storage (long-term storage or non-temp storage). SIT is a transit or cargo issue, but storage is a warehousing issue.
What is the problem if a moving & storage company has both cargo and warehouse coverage? But what coverage applies if the shipment is SIT under your van line’s Bill of Lading? Or another moving company’s Bill of Lading? Your cargo coverage would not apply to such a SIT claim, but would your warehouse coverage apply? Different insurance companies might have different answers.
Let’s deal with a shipment that is completely under your control — If your Bill of Lading shows the origin address as the shipper’s old residence and the destination address as the shipper’s new address), the period of time the shipment is in your warehouse is definitely SIT. Be sure to know the length of the SIT period allowed under your tariff or regulation – 90 days, 120 days or longer.
If your Bill of Lading shows the destination address as your warehouse, there is no SIT period – the shipment should be converted to permanent storage when it is delivered into your warehouse.
If the ultimate destination address or delivery date is unknown when a shipment comes into your warehouse as SIT, many movers automatically convert such a shipment to permanent storage. This may not be a requirement, but it is recommended to avoid problems. If such a shipment sits in your warehouse as SIT past the number of days allowed (90, 120, 180) without being converted to permanent storage and there is a claim for loss or damage, there could certainly be an insurance coverage problem! Cargo coverage no longer applies and without a warehouse receipt the warehouse coverage might not apply.
Remember, properly executed documents protect you!
PROBLEMS WITH INSURANCE COMPANY CLAIMS
I hear from both movers and brokers that many claims sent to an insurance company for settlement are just not handled to their satisfaction. The adjusters are too slow or just don’t understand all of the issues.
What can you do to make this process work better?
- First, what is your own authority for claim settlement? Some insurance companies allow movers to settle some claims up to a certain amount over the deductible – for example, your deductible + $250 or $500. Your own customer service people can generally settle smaller claims where there is no personal injury – but they should always get a claim release form signed by the customer.
- Make sure that you have all the facts and documents before you send a claim into your insurance company – Bills of Lading or Warehouse Receipts, completed claim forms, repair estimates, statement from the driver or crew chief about the incident or circumstances leading to a claim, names of witnesses or others who could corroborate the facts. Without all the facts, the insurance adjuster may come to the wrong conclusion.
- If the insurance company claim person just doesn’t understand the issues (an interline situation, van line or military claim, warehouse lien, etc.), get help! Ask your insurance broker, your moving association people, an attorney, or a consultant to review the claim and perhaps help explain the claim situation to the adjuster.
Ultimately, not all claims may be covered by your insurance, so have a good understanding what your insurance provides. The circumstances of each claim are different, so don’t assume that a claim will or will not be covered.
The start of a new year – 2018 – may mean lots of changes. Tax law changes, tariff changes, labor laws, regulatory changes from both your federal and/or state regulator. City, County, Fire, and other local jurisdictions may have changes that could impact your moving and storage business.
So, try to find out if any changes will affect you.
Remember that the ELD Mandate deadline was 12/18/17, and the delayed opening of UCR (Unified Carrier Registration) was January 5, 2018.
For MOVE-PAK CONSULTING, it means that we have moved! And, of course, we used a licensed and insured moving company who did a great job! We are still unpacking, but so far nothing has been damaged (except for my knees!)
The new address is 519 Alameda Street, Altadena, CA 91001. Anything that has been ordered through the website may be delayed until everything is unpacked. Sorry about that!
DOES YOUR INSURANCE POLICY COMPLY WITH YOUR CONTRACTS?
Movers are presented with many kinds of contracts; this article deals specifically with contracts between local movers and van line companies or broker/forwarder companies.
There are no “standard” agreements between local movers and van lines or brokers – each agreement can be different and can describe which party to the agreement is liable for cargo loss or damage, general liability or automobile liability bodily injury and/or property damage.
Under most van line/agent contracts, liability for cargo loss or damage is the responsibility of the van line, since that van line’s Bill of Lading governs the move.
However, a contract with a household goods forwarder or broker may make the local mover responsible for cargo loss or damage regardless of the name on the Bill of Lading. If your cargo policy only follows a Bill of Lading, there may be no coverage.
Under most van line contracts, the responsibility for bodily injury or property damage claims is clearly assigned to either the mover or the van line, but the responsibility may be different in a broker/forwarder contract depending on the circumstances of the move. If your insurance company does not understand these contract provisions, a claim could be denied when you should be liable or paid when you should not be liable.
To protect yourself, always have your lawyer review any contract before you sign it, and make your insurance representative fully aware of the provisions of any contracts.
DO YOU KNOW if all of your operations are insured?
Local Moving and Storage companies have diversified their operations over the past ten years. Now many companies conduct mobile and traditional self-storage, storage and delivery logistics, white glove delivery, records storage, commercial storage, appliance delivery and other kinds of operations.
As long as all of your vehicles are properly listed on your commercial auto policy, there should be no issues with your commercial automobile coverage. However, you need to be sure that your general liability policy includes coverage for all of your operations – providing for bodily injury and/or property damage done during the operation or delivery and for any loss or damage that may occur after completion of the project.
The real difficulties can arise in your cargo and/or warehouse policies. Some policies written for traditional moving & storage companies actually exclude some of these newer kinds of operations. For example, if your company does self-storage or mobile self-storage make sure that some coverage is provided – even though there is generally no legal liability for property classified as self-storage, there are circumstances where a mover or warehouseman could be held legally liable for damage. There could be similar problems with new furniture or logistics.
Tell your insurance person every kind of operation conducted by your company and make sure that your policies provide the appropriate coverage. You really need to know if you have the correct coverage before there is a claim that may not be covered.
DO YOU KNOW what may not be covered for premises claims?
A shipper is claiming that jewelry disappeared during a moving project – what coverage might apply?
In most cases movers do not accept responsibility for jewelry as part of a shipment. If you DO accept liability for loss or damage to high value items such as jewelry, your cargo coverage might apply to such a claim. However, if jewelry is not part of the shipment, most insurance policies have “employee dishonesty” exclusions. So, what can you do?
Some insurance policies have limited coverage for jewelry, some insurance policies with crime coverage might apply to this claim. Since some policies would have no coverage for this type of claim, have a conversation with your insurance provider to find out what coverage you might have. Also, your pre-move walk-through should make sure that no valuables are exposed.
What about damage that occurs AFTER the moving project? Water damage from ice makers, coffee systems, or washing machines; pictures that fall off the wall, furniture that falls over, beds that come apart, even boxes that cause fires… These are called “completed operations” losses and should be included in your general liability policy. Some general liability policies do not include the products/completed operations section – again, check with your insurance provider to be sure that you DO have this coverage. These claims don’t happen very often, but can be very difficult especially when children are injured by anything that movers leave behind.
MY OPINION–LEGAL LIABILITY FOR ACTS OF GOD?
There is no doubt that damage by hurricane or flood to goods in your care, custody or control is clearly part of the “Acts of God” exclusion found in nearly all Bills of Lading or Warehouse Receipts. You may not bear any legal liability for the initial damage by windstorms or floods.
After you get over the shock that there was a foot of water in your warehouse, that part of your roof is gone, or that two of your trucks were swept away by water, what do you do next?
First, contact your insurance person to report any damage and to find out what coverage you might have. Some cargo policies do not exclude flood damage; some policies have high deductibles for windstorm damage. However, many policies written for moving & storage companies have some “clean-up” coverage to prevent further loss. Find out what coverage you might have and what conditions might apply.
Next, as soon as possible start separating the damaged from the undamaged property. You should do this even if there is no insurance for clean-up. Water does not destroy everything – many things can be dried and repacked. This would be the action of a “prudent businessman” – to prevent further damage to customer’s goods.
In the final analysis, “legal liability” is what a judge determines. There have been instances where a warehouseman has been judged legally liable for not preventing further damage – not doing what the prudent businessman would have done.
If household goods are not cleaned, dried and re-packed, mold and mildew will develop. This could contaminate your entire warehouse or be a danger to you and your employees. Obviously, moldy goods cannot be delivered to your customers.
Do the right thing and act quickly to prevent more problems in the future.
What do you need to know about MOLD, MILDEW, FUNGI or BACTERIA?
Most Bills of Lading have language like this – “the carrier shall be liable for physical loss or damage to any articles from external cause …EXCEPT loss, damage or delay caused by or resulting: …from any defect or inherent vice of the article, including susceptibility to damage because of atmospheric conditions such as temperature and humidity or changes therein;..”
Since the growth of mold or mildew normally results from changes in temperature and/or humidity, movers are generally not held legally liable for this kind of damage. There are, of course, a few exceptions. Under certain circumstances, a mover could be liable for military household goods (although the regulations are somewhat unclear.) A mover could also be held liable for this kind of damage if they fail to promptly deal with water damaged property. Check your cargo policy language for these issues.
What about mold or mildew contamination to a residence? This could happen if contaminated household goods are delivered into a residence OR the moving operation results in water damage to the premises (such as from a badly connected washing machine). Most general liability insurance policies exclude bodily injury or property damage resulting from fungi, bacteria or mold. However, some insurance companies will provide limited coverage under the standard form — CG 24 25 Limited Fungi or Bacteria Coverage or under a company-specific mold remediation coverage endorsement.
Have a conversation with your insurance provider to understand what protections are available to your company.
Courtesy of MOVE-PAK CONSULTING – www.movepakconsulting.com or 213-760-7444.