Video originally recorded in September 2022
Protect Your Brand Through Reduced Liability
We have a Special Guest, Brian Jungeberg from Risk Strategies, our insurance consulting and brokerage partner, to help navigate what adequate protection for the logistics industry looks like. What can happen if you don't have the proper coverage and when you do, how does it benefit the client? Finally, we discuss the value and lessons learned of how great coverage supersedes the bare minimum.
Key benefits of watching:
- Gain valuable knowledge on how to reduce your liability exposure and protect your company, employees, and contractors.
- Discover the different types of insurance coverage available for courier businesses (e.g., Hired & Non-Owned Auto, Cargo, General Liability).
- Learn how to tailor your insurance policy to meet the specific needs of your business and clients (e.g., high-value cargo, industry regulations).
- Gain valuable insights from a transportation insurance expert (Brian Jungeberg from Risk Strategies).
Many companies with their own delivery operations, especially those for whom deliveries are not the primary focus, may overlook the high overhead costs associated with ensuring that their insurance coverage and premiums adequately protect their company in high-risk situations, such as driving in bad weather or traffic incidents. Courier companies that partner with industry-specific vendors, such as transportation insurance brokers, continually update their coverage to consider those risks for the client's benefit.
This video provides excellent information that is helpful for existing courier providers and businesses currently using couriers. For those considering using their own drivers, you'll be able to hear what receiving the appropriate insurance coverage entails and use it to help determine whether hiring or contracting is the best option for their business model.
Here's a story featured in the video, which can also be read in the transcript below:
"I mean, I'm not exaggerating. I had a phone call yesterday with a client who has never bought non-owned insurance. What's scary is that they have a claim from the driver who got into an accident. Their 1099 driver caused the accident, multiple injuries, broken limbs, and a punctured lung.
He's not great, which, unfortunately, means there's probably no protection for that courier company when they get dragged into the lawsuit, which is, nowadays, more of a likelihood than it ever was. And some of that's honestly chalked up to what some people would refer to as Uberization.
Transportation network companies have really exposed the 1099 model, I think, in a poor light because when it's done the right way like this industry tends to do...that's structured with the right insurance program like Excel or another courier company, it all works very well."
You can find more information about Risk Strategies Company's outstanding services at https://www.risk-strategies.com/industries/transportation/.
You can find more information about Excel Courier at www.excelcourier.com or contact us to learn more about reducing your liability by outsourcing your delivery services.
Video Transcript
Chris Marchetti 0:01
Hi. Welcome to this edition of the corner office. I'm Chris Marchetti. If you didn't know me, I'm with Excel Courier and Logistics. Today we have a very special guest. We're talking about our insurance.
The value of insurance is we carry insurance to protect our customers, carry insurance to protect our employees, and we carry insurance to protect our contractors. And it's important that you have the right kind of coverage to protect all those people involved with Excel.
So today, we're going to be talking with Brian Jungeberg, who's our insurance expert and main guy, and with that, thank you for tuning in. So what do you do for us here at Excel? Maybe tell the folks how..
Brian Jungeberg 0:43
Now that's a loaded question. No...
Chris Marchetti 0:44
Other than it cost us a lot of money.
Brian Jungeberg 0:46
That's it, I just spend your money. We, I would say that we work with risk management, right. So risk management can encompass procuring insurance products for you to help protect the business and your customers. It can be discussions on how we have a safer workplace, a safer warehouse. It can be all of those things.
A lot of times, it's working with the operations team or the sales team on, hey, we have a customer that's asking for these insurance requirements, right? Do we have these? If we don't have these? What are the costs? Should we be going back to the client and talking about something different with respect to insurance products and all those kinds of things in between? So, a lot of times, our team is pushing out certificates of insurance, proof of insurance, auto ID cards, all of this stuff that kind of is the nitty gritty insurance stuff that has to get done.
Chris Marchetti 1:40
Right, well, and you know, we're in a fairly unique space with the non-asset, generally non-asset maybe not totally non-asset, but let's add the asset-light, independent contractor model. And that's something that you all know a lot about. I mean, we have every now and then, you know, somebody, hey, check out this insurance company, and you talk to him, and then when you say, oh, he's independent contractors, they're like, oh, gosh, it's gonna sound like I'm hanging up, but I'm not really sure.
Brian Jungeberg 2:09
When I came into the business in the early 2000s, we were KIK insurance. And then and KIK had been born out of Osborne companies, where Jeff established kind of saw a need for the last mile space. Back then, we always called it courier messenger. Right, right. Right. And then it evolved. We actually sold that company to Oswald while we were at Oswald for a while, and then we left Oswald and started Brightstone insurance. And then from Brightstone, we're now Risk Strategies, so it's been the same team the whole time. But we've we've changed names a few times now.
Chris Marchetti 2:46
Well, hopefully, Jeff is kind of enjoying a little time away, or is he still kind of staying pretty involved with, you know,
Brian Jungeberg 2:54
He's fully retired now. Okay, take a second guessing his retirement. He's always the guy that likes to work. So, he's we're gonna try to find things to keep busy.
Chris Marchetti 3:03
I've heard that about retirement. Yeah, like, wow, man. You can only golf so much, right? Well, I could go off a lot because my game was so horrible. I could do a lot of golf, and they try to get better. So why is your insurance important to our industry, to the couriers, and to the customer?
Brian Jungeberg 3:18
Well, so I think most time, generally, the insurance space looks at asset-light or non-asset-based operations, and all I think of is Domino's Pizza. They were gonna get it there in 10 minutes or less, and they think of this kid, 16 screaming across town in his vehicle, and that couldn't be further from the truth.
But the insurance world is if they're frightened by something, they're gonna be frightened by something for a long time. So, I think where it gets very unique in your spaces, we do, you know, we do see the use of 1099 independent contractors. We even see employees driving their own vehicles with some operations, and it creates this unique exposure called hired and non-owned auto. So, you are hiring these guys to drive their vehicles and do deliveries, and it creates an exposure for them, and it creates an exposure for you as the company. And what your client wants to know is, hey, look, if something happens, God forbid, do you have insurance as Excel that's going to protect Excel and really what they care about, is that right? And that's what we specialize in.
So, there's, there's a unique way that you have to go about procuring that insurance. You have to look at what is required by the DOT right to have your motor carrier authority. You have to look at how you treat those independent contractors so that they remain independent contractors and somebody doesn't tell you their employees because that would be poor too. So, there's all those things that kind of go into it
Chris Marchetti 4:40
Right, right. Right. Well, I think you touched on something there is the value to the clients, you know, protect them from a certain level of liability, right? So, we are where they're removed slightly from a certain amount of liability. So that's beneficial to them, I think beneficial to the industry because there are a lot of courier companies that may be smaller that really don't have maybe won't have the necessary type of coverage. We talked about, like our first insurance guy, we said, we think we have insurance, and we'll find out as soon as we have an incident and then evolved over time to you know, a little bit higher level and a little bit higher level and met you all.
Brian Jungeberg 5:19
Here we have an old saying that's, you know, no one asked what the price was after the claim is covered. And that's, you know, that's very self-serving in one sense for the insurance to say that, but you know, we would say they don't have good coverage program like you guys do, then this is what they're using for insurance, which is a really poor way to go about it.
I mean, I'm not exaggerating. I had a phone call yesterday with a client who has never bought hired and non-owned insurance. (Chris: Wow). And yes, scary is that they have a claim from the driver that got into an accident. Their 1099 driver caused the accident, multiple injuries, broken limbs, and punctured lung. Yeah. He's not great, which, unfortunately, means there's probably no protection for that courier company when they get dragged into the lawsuit, which is, nowadays, you know, more of a likelihood than it ever was. And some of that's honestly chalked up to the you know, what some people would refer to as Uberization.
Transportation network companies have really exposed the 1099 model, I think, in a poor light, because when it's done the right way, like this industry tends to do it. You know, you've got a lot of people moving product along and doing that. And in a way that's structured with the right insurance program from where you guys sort of like Excel or another courier company, it all works very well. The early days of Uber and Lyft, and younger companies like that, you know, kind of sour people to their opinion of 1099's, and every plaintiff's attorney loves seeing those types of claims now, so it's it used to be really more of a severity issue in terms of losses, and it's sometimes now becoming a frequency issue in certain geographics where they're, you know, in the know about what to do to extort money from insurance.
Chris Marchetti 7:07
And I think about that a little bit in terms of, you know, you can have very minimal you can have, you know, I just like your own personal insurance you can have the whole range from just a little bit, up, you know, what can you tell us about that?
Brian Jungeberg 7:20
So, that client, for instance, you know, just kind of your normal Hey, I have cargo in general liability mindset, right. And you think, wow, there's this big auto exposure out there, you haven't done anything to address it. The next stage would be our recommendation for anybody auto liability, whatever that means, depending on how your operational makeup is ready, you know if your asset-light or no asset to purely hire, not own, maybe it's a fleet auto liability policy to cargo general liability.
And I'll say this as a caveat. Recognize what I say; sometimes it's a little different because we build in some bells and whistles in our coverage forms that isn't standard by most of the insurance industry standards, right. So, you may also need a crime policy if you're not working with one of our forms, and you would need that because, well, if an independent contractor were to steal cargo, and you didn't have a crime policy, you've just had a standard cargo form that wouldn't be covered automatically for you. We don't need that it's built into the coverage form we do for you on the cargo.
So it's those little things where if you understand the industry in the space and how it operates, you're kind of looking at protecting both you and the client, almost without thinking, having to think about it right. I want, we want it to be out there and automatic so that we know we're taking care of everybody that's involved if there's a claim or a loss.
The next level, then, I think, after you look at auto liability cargo in general liability is, you know, probably from a liability standpoint, is thinking about something like an umbrella or an excess liability policy. And what that does is takes your million-dollar coverage on the audio side and expands it to 2 million or 3 million or 4 million. There's been way too many losses over the last few years that have what we call nuclear verdicts that will eclipse $10 million.
I get asked the question all the time, what's the right amount to buy? It's a tough one to answer, sometimes, you know, it can be what you're comfortable with what makes you sleep at night as the insured, as the owner of the company. It might be very simple because the client's dictating what you need to carry based on requirements to work with. So, you got to kind of have to hit the right, you know, amount of coverage versus what's required versus what the spend is.
Chris Marchetti 9:38
Like I always say to Brian, every time at this time of the year when we are renewing. I'm like, I don't like you very much because it's always a lot of money. And he says to me if you needed me, you'd be glad you spent the money. So I say you're right here's the check I remember the money.
But it's kind of, I think something else you've touched on that was interesting is that different types of stuff. Like we may have a customer who's a jewelry store, and you'll say, hey, we've got a special little writer because of that type of store or some of the medical stuff that we do, you need different types of, you know, and they can be client specific. Yeah.
Brian Jungeberg 10:17
So what you left out is I have to pry the check from your hand. But beyond that, yes, we can carve out things. I think that's one of the fun parts. I tell people all the time. They say well, what do you know, you're you schlep insurance all day, we build puzzles. I mean, it really is no operation in your world. And I think you would agree with this is the same for everybody does something are different. And that's where the nuances come in to understand. Okay, you tell me how you what you do, and what clients you work with and the goods you're handling. So that and we'll figure out what makes sense.
Sometimes, you know, you'll have a client come back and say, well, that's great that you have $100,000 in cargo coverage, but we want a million, right? It'd be very costly, maybe, to put that over all of the operation, and frankly, you may not have that exposure that you really need it, but for that client, you may, okay, we can do a little carve out just for that client specific work and take care of them that way. You try to strike the balance again of function and affordability. Then that, in turn, really helps you be able to do what you do for the client without breaking the bank and turning the screws with them from a race standpoint.
Chris Marchetti 11:23
For all the customers out there, you see, this is work Brian and the company like, you know, a reputable company, and we provide a lot of insurance. For all your competitors out there trying to learn some good tips, Risk Strategies is a great company to work with. Brian's a great guy to work with and really knows what he's talking about. So thank you, we want to give any, any plug for risk strategies while we're here last minute plug on where we would
Brian Jungeberg 11:51
We would love to talk to anybody in the space, and I think that, hopefully, our clients would all say you may not always love what we had to say. But we're going to tell you anyways, and we're gonna help you make the decision that works best for your company. We're not an all-or-nothing shop. We're just, been around a while under different names, but we're not going anywhere anytime soon, either. So, if it doesn't work out this time around, we talk. Who knows what happens in the future but use us as a resource.
Chris Marchetti 12:18
Right? First of all, they did a great job for us. And I think he was something else that you're also it's not just you don't just sell us insurance. You also help us understand stuff. So, when we talk about things, sometimes you know we get a contract. I send you contracts a lot, and you'll say, well, they're asking for this or that, but you know, that's maybe not applicable. You know what, you should talk to them about this or that. I mean, as Brian would say, he's not an attorney, so he doesn't give me legal advice. But he does, as a partner, kind of say, hey, you know, when you're looking at this, you might want to ask him about that or do they really need this? So, I mean, it's really valuable. The relationship was great.
Brian Jungeberg 12:58
Happy to do it. We appreciate the long-standing relationship.
Chris Marchetti 13:01
Yes, us as well. So don't forget you can see us; go to www.excelcourier.com to see us. You can go subscribe to YouTube. Follow us on LinkedIn. As we say, we're moving lives forward every day. And people like Brian help us move lives forward. So, Brian, thanks for being here. Thank you. Appreciate you. Hey, thanks.
The Excel Team: Nov 21, 2024 8:00:00 AM
