Insurers are distancing themselves from the transportation industry amidst a trend of multimillion-dollar accident payouts, leaving trucking companies scrambling to find coverage for their fleets, reported The Wall Street Journal.
In recent years, juries awarded accident victims — or their families — tens or even hundreds of millions of dollars, according to the report. Many insurers have dropped coverage for individual truckers as they are unwilling to bear the risk of these major settlements. Insurers willing to bear the risk increased prices by as much as 30 percent.
Earlier this year, Zurich Insurance Group and American International Group — the two biggest insurers in the industry — dropped coverage of most for-hire fleets, although they still cover trucks operated directly by retailers and manufacturers, reports WSJ.
Their departures left trucking companies searching for alternative coverage for their drivers and put additional stress on the already strained industry.
"When [AIG] pulled out, it really triggered a panic," Mark Brockinton, a broker at Aon who works with large trucking companies, said in the WSJ report. "Some of these verdicts I think caught them flat-footed."
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