Tag: Trucking Regulations

California Courts Declare Dynamex Ruling Applies Retroactively

Bob Holtzman

In California, the state’s Court of Appeal came to the conclusion that the state’s Supreme Court Dynamex decision was to be applied retroactively. The original case from earlier in the year spun off into legislation known as the AB5 bill, which limits the use of classifying workers as independent contractors rather than employees by companies in the state. For those in the trucking and freight industry, it has been anything but well-received as protests have even been planned out in response to the legislation.

The fallout from the Court of Appeal’s decision outlines that employers who rely on independent contractors may now be subject to potential liability claims for wage and hour disputes based on a legal standard that did not exist before April 2018.

For Dynamex, the California Supreme Court brought on a new test to determine whether a worker is considered an employee or an independent contractor. The new test added two new requirements that an employer must meet to establish the worker is, in fact, an independent contractor. To no surprise, employers are arguing that the new standard should only be applied moving forward.

Regardless of how it’s applied, the legislation is causing confusion around how employers should provide or pursue getting commercial truck insurance. Commercial truck insurance has policy limits that apply to specified workers, and having different or fluid classifications is hard to grasp.

In another case in the state, Gonzales v. San Gabriel Transit, Inc., a transportation driver brought a class-action suit on behalf of himself and other freight drivers, expressing that they were misclassified as independent contractors rather than full-on employees. The issue on appeal zeroed-in on whether or not the claim was suitable for class action certification. And while the transit company in question didn’t bring up the issue on appeal, the Court of Appeal initially considered if the Dynamex rule applied retroactively.

In this case, the court concluded that the Dynamex decision indeed applied retroactively based on the fact that it did not establish a new standard. Employers now have potential risk exposure that goes back years now following the decision (the limit is four years as this is the maximum statute of limitations for wage and hour claims).

Now, trucking companies and professionals in the industry are looking to January 1, 2020, the date that the AB-5 bill, spun out from the Dynamex court decision, will take effect. The bill expands on Dynamex, applying the test to all claims coming out of the Labor Code of California. The difference being that the Dynamex decision has been seen as only applying to claims coming from California Wage Orders.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes.

Recent Bills Create Trouble for California Truckers

Bob Holtzman

California Governor Gavin Newsom has been busy this year with deploying new state government bills surrounding truckers and other contract workers in the state. This fall, Newsom signed three bills into law that add more to the state’s hold on the trucking industry, adding more regulatory costs and compliance burdens on companies of all sizes, and possibly causing smaller companies to have to shudder.

Senate Bill 210, for example, creates a new emissions inspection program for commercial trucks. The law requires that a new Heavy Duty Vehicle Inspection and Maintenance Program for trucks and other heavy vehicles be implemented by the California Air Resources Board (CARB). CARB will also move forward with creating licensing standards for the inspection and repair shops throughout the state and oversee a new compliance certificate that truck drivers will have to keep with them in the vehicle. Additional fees will be put forth toward the new Truck Emissions Check Fund.

Clearing the Air

California air regulators have already put in motion that the trucking industry makes more efforts to be more energy-efficient and boast cleaner engines, cutting down on the smog. The Statewide Truck and Bus Rule set back in 2008 requires all heavy-duty trucks have new or retrofitted engines in order to operate on California roads. This major expense didn’t get a lot of legislative support, which is why the revised SB 210 bill was put in place to acknowledge the investments made by the trucking industry as a whole to upgrade the fleets on the road.

Trucking companies may now have to buy new equipment under another new bill, SB 44. The bill directs CARB to update its 2016 mobile source strategy to include a “comprehensive strategy for the deployment of medium-duty and heavy-duty vehicles.” The California senate wrote out an analysis of the bill, stating that CARB will be making its own new regulations to uphold and support more commercialization efforts of medium- and heavy-duty trucks that help to reduce greenhouse gases. A goal that has been speculated is that this will prompt manufacturers to produce more electric or hydrogen-based trucks.

Jeopardy on the Road

The bill that’s been getting the majority of the attention in the industry, however, is the recently passed AB 5, which will essentially end the practice of truckers working as independent contractors. Trucking firms will now have to hire drivers as employees instead of contract workers, making them responsible for everything from payroll taxes to workers’ compensation insurance, commercial truck insurance, and paid sick days, among other regular job perks.

Smaller companies are already starting to see the squeeze the bill is having on the industry, with some having to close up shop or lay off the majority of their drivers due to the new fees. The cost of trucking is built into the price of everything that is trucked throughout the state.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes.

AB-5 Signed Into Law: What That Means for Truck Drivers

Bob Holtzman

This past September, California Governor Gavin Newsom signed into law new legislation focused on making things a little more difficult for independent owner-operators, such as truck drivers and gig economy workers, possibly even putting them out of business.

The AB-5 legislation originally passed the California State Assembly back in May and was passed by the state Senate on September 10. What it does is move last year’s Dynamex California Supreme Court decision into law, which established an ABC test to determine the status of an independent contractor that could essentially eliminate the owner-operator model in California, and disrupting everything from investing in commercial truck insurance, such as general liability insurance, and the sharing economy.

Taking effect starting January 1, 2020, those in the trucking industry could find themselves in the crosshairs. So, what does this all mean for trucking professionals?

Trucking Companies and Professionals in AB-5

While there is little proof that trucking professionals and companies have abused the independent contractor model in the state, AB-5 is still in place to essentially paint with a broad brush in banning the use of independent contractors rather than deal with individual abuses.

The state’s trucking industry has been trying to work with legislators to find exceptions for legitimate independent contractors who follow the rules. Many workers are exempted from this ruling, like doctors, dentists, and engineers, but not trucking or gig economy workers, like those working for Lyft or Uber.

The new bill does not necessarily distinguish between a driver who’s an independent contractor under a truck lease-program and someone who owns their own truck. Those opposed to the ruling argue that this essentially destroys the independent contractor model for trucking.

In California, there are more than small 136,000 trucking companies that are locally owned with small fleets and independent drivers who take care of their operations. This means that motor carriers and owner-operators are left in the lurch trying to figure out a strategy for what they can do now.

California is currently experiencing a truck driver shortage, much like the rest of the nation, but maybe even more so, since the state is highly dependent on the flow of goods coming from Mexico or Arizona. The new measure may aggravate the issue at hand by removing thousands of drivers from the road because of de-classifying them.

Currently, there are lawsuits that have been filed to fight the issue and look for ways to exempt these companies and their drivers from the classification. Additionally, companies like Uber, Lyft, and DoorDash, all dependent upon independent contractors, have invested in a collective of $90 million to bring this issue to the ballot during the next voting season.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes.

FMCSA Proposes New Rule to Increase Service Hours Flexibility for Drivers

Bob Holtzman

In August, the Federal Motor Carrier Safety Administration (FMCSA) published a long-awaited proposal for changes to hours of service rules that would help add more flexibility for truck drivers on the road.

These hours of service rules, first adopted in 1937, specify the permitted operating hours of commercial truck drivers and have gone through multiple revisions. The newer mandate requiring electronic logging of hours that took effect in December 2017 featured some of the shortcomings in how these rules are applied in the everyday driving habits of truckers.

The FMCSA, through an advanced notice period of proposed rulemaking, asked for comments from the public on how to help add flexibility in realistic ways to the industry. Based on those responses, the regulatory body came up with a new rule to increase service hours flexibility.

What to Know

The FMCSA came up with five components to the rule change, helping to keep safety in the spotlight. Trucking companies can face claims from truck drivers if they feel overworked, leading to accidents or injuries on the road. Commercial trucking companies can take out commercial truck insurance plans to make sure they are covered in the event of a professional claim, especially with something like workers’ compensation insurance.

And while protecting against claims is a must for trucking companies, it’s good to know what changes were made to the hours of service. They include the following:

  • Changing the 30-minute break requirement to require a break after eight hours of uninterrupted driving time, not on-duty time, and allowing the break to be satisfied by a driver using on-duty/not driving status, rather than off-duty status. If a driver has to take a break to add fuel to their truck or use the restroom or grab a quick bite, that can count as their required break.
  • Allow drivers to split their required 10 hours off-duty into two period. This can include one period of at least seven consecutive hours in the sleeper berth and the other period of not less than two consecutive hours, either off-duty or in the sleeper berth. This would allow for a 7/3 or 8/2 split. Neither period would count against the driver’s 14-hour driving window.
  • Allow one off-duty break of at least 30 minutes, but no more than three hours, that would pause a truck driver’s 14-hour on-duty window, provided the driver takes 10 consecutive hours off-duty at the end of the work shift. This would alot drivers to take up to a three-hour break to bypass rush hour, without affecting their on-duty time.
  • Modify the adverse driving conditions exception, adding two hours to the maximum window during which driving is allowed. The current rule allows for that extra time but it still has to be within the maximum 14-hour workday. The proposal would allow that workday to be lengthened to as much as 16 hours in instances where things like extreme weather or major traffic congestion become a factor.
  • Change the short-haul exception available to certain commercial drivers by extending the drivers’ maximum on-duty period from 12 to 14 hours and lengthening the distance limit within which the driver may operate the wheel from 100 air miles to 150 air miles.

The FMCSA expressed, through a press release, that the proposed rule wouldn’t increase driving time and instead would continue to prevent trucking professionals from driving more than eight consecutive hours without at least a 30-minute change in duty status. What’s more, the FMCSA says the proposed changes are estimated to provide $274 million in savings for the economy in the United States as well as American consumers.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes.

Compliance Requirements for California Vehicles

Bob Holtzman

In recent years, California has seen a number of regulations change or be created in order to cut down on emissions, greenhouse gases, and traffic while boosting alternative fuels, for example. One industry affected by new rules and regulations is the freight industry, or trucking, which plays a huge role in the state’s economy.

Last year, California saw record-setting levels of freight-hauling demand and driver pay as trucking levels reached a 20-year high. From produce to animals to tech commodities, California sees high numbers of trucking freight hit the roads. But State regulations of trucking and bus operations are finding numerous ways to hit the trucking industry.

Here is a better look at how compliance requirements in California are affecting the freight and transportation industries.

Vehicles Affected by Regulations

The Truck and Bus regulation affects individuals, private companies, and Federal agencies that own and operate diesel vehicles that weigh in at more than 14,000 pounds. But it also extends out to publicly and privately owned school buses, even though their compliance requirements differ. Local and state government vehicles aren’t affected by the regulations because they are already subject to other regulations.

Heavier Trucks and Buses

Heavier trucks and buses on the road that weigh more than 26,000 pounds must comply with a set schedule by engine model year or owners can report to show compliance with more options. Engines made any time after 1996 should have an OEM or retrofit PM filter installed as vehicles made prior to 1996 should have already been replaced by January 1, 2015. The goal from the state is to have all trucks and buses driving with 2010 model engines by January 1, 2023.

PM Filters

Some trucking companies and individual owners have sought more information on PM filter installations. These are the filters that reduce particulate matter and cut down on smog and pollution. Owners who did not install PM filters before January 1, 2014, and do not use flexibility options are required to replace existing trucks according to their model year schedule.

Getting hit with fines can be costly and sideline a trucking company’s business altogether; especially smaller companies that can’t afford to have their trucks sit while they work on getting compliant, which is also a costly endeavor. While not all claims can be held off, there are options to keep fines low and representation costs minimized. Through comprehensive truck insurance, trucking companies can limit their exposures and make sure the increased values of their equipment are properly protected.

What About Lighter Trucks?

Lighter trucks and buses that fit right in the middle of that 14,000-26,000-pound window already had engine replacement requirements set on January 1, 2015. Lighter vehicles with engines that are more than 20 years old need to be replaced with newer trucks or engines, and beginning January 1 of next year, all remaining vehicles who have yet to take this step need to have 2010 engines or newer.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes.

AB 5 Passes California State Senate Hearing – What Does this Mean?

Bob Holtzman

In California, the trucking industry is in the middle of a legislative upheaval over certain exemptions and tests for truck drivers on the state’s highways. Legislation that could disrupt the owner-operator trucking model in California is headed to Governor Gavin Newsom’s desk to be signed.

Assembly Bill 5 (AB5) passed the state senate’s Standing Committee on Labor, Public Employment and Retirement by a 4 to 1 vote, opening to door to codify the ABC test for employee status prescribed in the 2018 Dynamex decision.

Supporting the legislation would help to seek to protect workers from employers that attempt to classify them as independent contractors instead of employees. It could also affect the price of ride-sharing apps like Uber and Lyft, which will likely create higher prices for consumers.

What the Bill Is

Under the bill, many workers who are currently under the label of independent contractor would be considered employees. This would make them subject to the state labor laws in California. What’s more, employers would have to pay payroll taxes, provide benefits, overtime, minimum wage, workers’ compensation and, in many cases, also provide the commercial truck insurance.

Opposing the Bill

The bill in its current form would hurt the owner-operators who want to stay independent. The test, which designates employee status in the legislation, provides no leeway for independent truck drivers who work with other trucking companies; including truck brokers. Trucking associations, such as the Western States Trucking Association (WSTA) have come out against the bill. They warn that the liabilities that come from it would hit employers as a result of reclassification and would ultimately lead to many, if not most, refusing to work with owner-operators.

What Happens Now?

Now, the future of the legislation is still a bit hazy. AB5 needs to be taken up by the state Senate’s Appropriations Committee, which won’t happen until later this month after the legislature’s recess is up. From there, the bill would go to the Senate floor for a major vote. If successful there, it then passes on to the Assembly chamber for a concurrence vote.

In the end, if it hurdles over those steps, the bill would then head to Gov. Newsom for signing, although Newsom does have the power to veto. Another hitch is that the bill needs to be passed by September 13 when it would die if not written into law.

Make sure to check back for future updates on this legislation.

About Western Truck Insurance Services

Western Truck Insurance Servicesis a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes.

FMCSA Update: California Yields to Preemption Determination

Bob Holtzman

Following the Federal Motor Carrier Safety Administration’s determination in December of last year that federal law preempts California’s meal and rest break rules, many trucking companies are trying to determine how this is going to affect them with the California courts.  Los Angeles Superior Court became the first state court in California to apply the determination to armored truck driver claims for meal and break rules in the state; decided in favor of the Federal Rules.

Let’s take a closer look at what the preemption determination is and how trucking companies should proceed.

How to Proceed with This Ruling

 The recent court orders are good news for trucking businesses with drivers subject to federal rules, but these companies should still be concerned about the state objectives on enforcing the meal and break rules. Trucking companies can still be hit with claims from drivers, and their opportunistic attorneys when it comes to rest and meal breaks. Having a knowledgeable commercial truck insurance broker to consult with is an added avenue of defense.

Preemption Determination

The FMCSA decided in December of 2018 that federal transportation law preempts (takes priority over) California’s meal and rest break rules when a driver is subject to federal hours-of-service requirements. Essentially, what this means is that California’s laws were looked at as incompatible with the federal regulations, which is causing a burden on interstate commerce.

Applying the FMCSA’s Rules

In May of this year, a district court in California ruled on the issue and dismissed a claim made for truck drivers meal and rest breaks. The court made it known that it doesn’t have the authority to enforce the regulations around meal and rest breaks. Following that ruling, the Los Angeles Superior Court, as mentioned above, made its decision surrounding armored truck drivers’ meal and rest break claims, determining that federal rules governing the hours of service for both long- and short-haul drivers preempt (take priority over) the state rules in California.

The court ruled that it was “obligated to recognize the supremacy of federal law under the United States Constitution and the oath of judicial office”. The court also determined that it has no choice “but to respect and enforce the FMCSA Administration’s preemption determination without trying to second-guess its legal or policy correctness.”

This issue will be continually evolving. Keep an eye out for future blogs with updates on this ruling.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes.

Trucking News: What’s the Status on Owner-Operators in California?

Bob Holtzman

Currently there are competing bills in California state legislature that are aiming to address an April 2018 ruling by the state’s Supreme Court that has threatened the traditional owner-operator model within the state. The bills are pointing to trucking groups wanting to upend years of law used to decide if a worker is an employee or an independent contractor.

Independent contractors make up a large portion of the transportation industry workforce in California. These independent contractors are mostly truck driver owner-operators and the major concern has to do with benefits truck drivers feel they are owed as well as being determined full-on employees.

The Ruling

On April 30 of 2018, the class action lawsuit produced an “ABC test,” or an assessment designed to strictly outline who can be classified as a contractor within the state. This will not only effect truck drivers, but virtually all who work in the growing gig economy (think delivery drivers, ride-sharing employees, etc.). The new standardized testing determines that a worker is an employee under the wage orders unless the hiring company establishes all three of these factors:

  • The worker is free from the control and direction of the hirer in connection with the performance of the work
  • The worker executes work outside the usual course of the hiring entity’s business
  • The worker is engaged in an independently established trade of the same nature as the work performed for the hiring entity

Essentially, the test assumes almost all workers are employees and eligible for the wide protections of California wage laws including overtime pay, meal breaks and minimum wage.

Another benefit workers are vying for are insurance options. From dental to medical, independent contractors are looking for the right coverage, especially given the dangerous nature of the trucking business. And while this is something that is still being volleyed back and forth by the court system in California, trucking companies can invest in commercial truck insurance to provide their own protection.

Having commercial truck insurance will help provide trucking companies with the protection needed to financially safeguarded against injuries drivers sustain on the job.

Gaining Opposition

The Western States Trucking Association has been looking at the idea of legality of the entire trucking industry in the state. The association pushed for a lawsuit filed earlier this past year against California over potential enforcement of the new ruling.

Western States has argued that the ruling violates federal law governing interstate transportation. The group is hoping for a long-term solution to the issue, to push the state legislature to act and correct the court’s decision to require testing.

The California Chamber of Commerce is also working to limit the effect of the ruling, especially since some of its members include trucking companies. The chamber has put together rallies at the state capital in Sacramento supporting workers’ right to choose to operate as independent contractors. Some motor carriers are considering changes to their operations after the ruling as well by turning over hiring to a brokerage firm for example.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates and coverage changes.

Why Pollution Coverage is Necessary for Trucking Operations

Bob Holtzman

Trucking companies that invest in a standard truck insurance policy may find adequate coverage against liability claims related to accidents and cargo, but typically don’t have protection against claims related to pollution. It’s no secret that semi trucks emit more pollutants the average car on the highway and some trucking companies have suffered having this exclusion.

With a sharper eye on the trucking industry and its impact on the environment, new players are coming into view to try to alter the impact of semi’s on the road, such as the electric Tesla semi. Regardless of emissions, trucking companies currently on the road today need to understand just how important pollution coverage is in a packaged insurance policy.

Regulation

In 2017, the Environmental Protection Agency announced settlements with three major companies in regards to penalties for violating the state’s truck and bus regulation.

Diesel emissions from trucks are a large source of pollution, relating to health issues like asthma and cardiovascular effects in adults. Many heavy duty trucks are older vehicles and emit high amounts of pollutants. Totaling more than $200,000, the fines pointed out that the companies either failed to install particulate filters on their diesel trucks or failed to verify that trucks they hired for use complied with state rule.

Pollution Conditions

Even if trucking companies aren’t known for shipping hazardous cargo, such as waste, and instead known for trucking harmless natural materials, they have the potential to cause conditions related to pollution.

In recent years, the definition of pollutants has widened to include dirt and rocks. This is due to the Clean Water ACT (CWA) from federal environmental regulations, which put the term on those materials because they could possibly contaminate the water of a new area they’ve been shipped to. There are endorsements, such as MSC-90, that trucking companies can add to their current policies to make sure their inventory and business are safe.

Upset or Overturn

If an accident on the road involves a commercial vehicle that’s hauling hazardous or pollutant materials, this could spell trouble for the trucking company. If a tanker truck, for instance, is damaged in said accident, spilling some of its cargo (i.e. pollutants) on the road, there are costly repercussions associated with this. Property damage rates can skyrocket and repairs to vehicles can be another hindrance toward a commercial trucking company’s bottom line.

With the right coverage, your business can be safeguarded against environmental claims, cleanup costs, and claims of bodily injury or property damage.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates and coverage changes.

Explaining the Most Important Trucking Bonds

Bob Holtzman

As a trucking company, depending on your state and the type of trucking business you operate, you may be required to be issued one of a variety of bonds, also known as a “surety” bond. Four of the most common trucking bonds are C.O.D. bonds, motor vehicle registration bonds, U.S. Customs bonds, and freight broker bonds. The following information will give you a basic overview of those types of bonds and when they would be necessary for your operation.

COD Bond

COD bonds are also known as Collect on Delivery bonds. With a COD bond, a surety company will provide the obligee a guarantee that clients, vendors, customers and employees will provide payment for financial damages in the event that a licensed business violates licensing laws. The purpose of these bonds is to allow the trucker to deliver freight and collect the shipers payment for the goods being delivered from the consignee (also known as the receiver).

Here’s how these bonds work. The bond will pay up to the bond amount stipulated on the bond form. The surety company reviews claims from the public to determine the validity of their claim, however, the licensed business owner is still responsible for their actions and must reimburse the bond company for payments made of face license suspension. The bond company also directly receives claims from the public and determines the validity of claims.

Ultimately, the licensed business owners are responsible for their actions and required by law to reimburse the surety company for any payments made under the bond or face indefinite license suspension.

Motor Vehicle Registration Bond

Motor Vehicle Registration bonds, also called service bonds, must be issued by an insurance carrier admitted by your specific state. The insurance company issuing any surety bond is referred to as the “bond company” or “surety company”. The trucking company business is called the Principal, the bond company is known as the Obligor and the State Department of Motor Vehicles is the Obligee.

In the event that the Principal violates licensing law, the bond pays the vendors, employees, and customers financial damages up to the amount stated on the surety form. The purpose of this bond is providing the shippers with a guarantee of them receiving their payment from the trucking company.

U.S. Customs Bond

U.S. Customs bond is a financial guaranty between 3 parties: the Principal filing the bond, the Insurance company issuing the bond, and Customs & Border Protection (CBP). The bond is a guarantee to Customs & Border Protection that they can seek financial compensation up to the bond amount in the event that they aren’t able to collect money due from the Principal. The bond indemnifies the surety company, which allows them to collect from the Principal any money that was paid to CBP on the Principal’s behalf, using any legal means.

Freight Broker Bond

The Federal Motor Carrier Safety Administration (FMCSA) has a requirement that forwarders and freight brokers secure a freight broker bond as part of their freight brokerage licensing process. The bond is meant to protect motor carriers and shippers and the contractual obligations they have with freight brokers.  For example, if a freight broker refuses or delays payment unreasonably, the freight broker bond ensures that shippers and carriers receive compensation.

If you have questions about trucking bonds or any other truck insurance needs, we have the answers. Give us a call today for more information about these forms of coverage.

About Western Truck Insurance Services

Western Truck Insurance Services is much more than a commercial truck insurance agency. Since 1954, we have provided our clients with unparalleled service for truck insurance quotes, customer service, coverage charges, insurance certificates, and more. We are committed to providing our clients with the service to keep their costs to the minimum and their opportunities to the maximum. For more information about our products and services, give us a call at (800) 937-8785 to speak with one of our experts.