[Editor's Note: The following content is sponsored by Cassiday Schade, LLP; MC Consultants, Inc.; and Fleet Response.]
What are the biggest challenges facing insurers in transportation-related claims and litigation? How is technology shaping the industry? And finally, what problems would our experts solve first? Find out below.
FROM YOUR PERSPECTIVE, WHAT ARE SOME OF THE BIGGEST CHALLENGES INSURERS FACE IN TRANSPORTATION-RELATED CLAIMS AND LITIGATION?
KRISTINA ASHCRAFT, MC CONSULTANTS, INC.: With the introduction of smartphones and hands-free driving, distracted driving has risen to a whole new level. With the legalization of cannabis in many states across the country, a new element of impaired driving has entered the picture. Other factors, such as worsening crash severity, rising repair costs, and skilled driver shortages have significantly impacted the costs associated with handling transportation-related claims. Verdicts and settlements have been trending upwards over the last several years as plaintiffs’ lawyers have pursued trucking companies for negligent hiring, training/supervision of drivers, as well as a failure to implement safety practices. In some cases, this has resulted in juries awarding tens or even hundreds of millions of dollars.
ROGER CERVENKA, FLEET RESPONSE: Managing speed and cost are the most important components to managing transportation-related claims and litigation. Thoroughly conducting an investigation on all new claims is critical. This starts with the initial loss report, which is an essential part of the claims process to identify all potential exposures. Missing details that can aid in the liability investigation can be a costly mistake when dealing with commercial claims. It all comes down to thorough and accurate investigations. Understanding the loss venue or shared negligence jurisdictions, promptly securing post-accident drug testing, having accurate vehicle maintenance records, obtaining drivers’ logs, and responding fast to anything that has the potential for exposure are important parts of the claims process. If the claim results in litigation, your claim is only as strong as the evidence and documentation you obtained. Trying to go back months or even years later to piece together details and fill the gaps of an inadequate investigation can decrease your success rate in court and increase your exposures significantly. Being able to provide evidence and documentation that counters claims being brought against you by using the quality documentation you secured within a timely manner is key.
JAMES A. FOSTER, CASSIDAY SCHADE, LLP: Plaintiffs’ attorneys’ playbook of issuing time-limited policy demands has skyrocketed in transportation litigation. This is an extremely high-risk demand on an insurance carrier, particularly if there is a catastrophic injury and only $1 million in insurance coverage. Time-limited policy demands should be immediately communicated to the insured to advise that they have the right to retain personal counsel, and state-specific laws on time-limited policy demands must be evaluated. In order to avoid extra-contractual liability above the amount of the insurance policy in a future bad-faith trial, best practices require an insurer to respond based upon a good-faith evaluation of the time-limited policy demand.
WHAT TECHNOLOGY TRENDS IN TRANSPORTATION ARE EMERGING? OR, CONVERSELY, WHAT IS A BENEFICIAL TECHNOLOGY THAT HAS TAKEN HOLD IN THE INDUSTRY OVER THE LAST FEW YEARS?
ROGER CERVENKA, FLEET RESPONSE: Some of the newest technology trends that are emerging in the industry are self-driving vehicles; however, there are infrastructure challenges that need to be worked out. Intelligent speed adaptation is an advanced system that helps drivers stick to the speed limit. The technology uses a global navigation satellite system, such as GPS, which is linked to a speed zone database that allows the vehicle to understand its location and the speed limit for the road. More heavy-duty truck manufacturers are installing frontal radar detection to assist in lowering frontal collision damage from inattentive drivers. Electronic driver logs are helping to keep roads safer, too.
JAMES A. FOSTER, CASSIDAY SCHADE, LLP: We can expect Level Four autonomous trucks in 2024-2025. In Level Four, there is no need for a driver, which would eliminate potential aggravating factors that may support a nuclear verdict, including driver fatigue, hours of service, impaired or distracted driving, as well as training issues. Although the litigation landscape is not certain, there may be a negligence theory brought against the artificial intelligence technology developer, as its software and algorithms are the “brains” behind the system that processes, plans, and controls the truck. There may also be product liability counts brought against the original equipment manufacturers, as well as the manufacturers of the safety technology components. There may also be indemnification agreements in place that would need to be analyzed and addressed by defense counsel.
KRISTINA ASHCRAFT, MC CONSULTANTS, INC.: Trucking experts have been concentrating on technology alternatives that improve safety, efficiency, and cost-effectiveness. Advanced collision mitigation systems are reinventing the tools that truckers have at their disposal to avoid crashes. Newer semi-trucks are being equipped with improved sensor technologies that monitor potential crashes and assist drivers in taking defensive actions. Older vehicles and those with outdated technologies are also being retrofitted with these new sensor systems. Advanced technologies in dashcam video add-ons have also lowered the risk of potential collisions and fraudulent insurance claims. Autonomous trucks have been making progress toward commercial deployment, and many believe they are the future of transportation. Obviously, infrastructure challenges remain; however, technology experts are steadily at work on making self-driving trucks a reality.
TRUCKERS WERE ONCE THE HEROES OF THE PANDEMIC, AND THAT STATUS WAS THOUGHT TO HAVE AN IMPACT ON LITIGATION. ARE THEY STILL THE HEROES?
JAMES A. FOSTER, CASSIDAY SCHADE, LLP: In my view, truck drivers and trucking companies have always been heroes, particularly during the pandemic when they brought food, medicine, medical equipment, and vaccines to protect the safety of our communities. Truckers do not needlessly endanger the public and are not a threat as plaintiffs’ attorneys would argue in a reptile theory attack. One effective trial tactic to guard against a nuclear verdict is to humanize or personalize the trucking company. The core value of safety can be highlighted through its safety department, policies and procedures, training, community involvement, as well as its safety record and safety awards.
IF YOU COULD WAVE YOUR MAGIC WAND AND RID THE TRANSPORTATION INDUSTRY OF ONE PROBLEM, WHAT WOULD IT BE?
KRISTINA ASHCRAFT, MC CONSULTANTS, INC.: In trucking accident lawsuits, plaintiffs’ attorneys use the reptile theory to turn a jury’s attention away from an incident and focus instead on a motor carrier’s safety practices and policies—even when the motor carrier follows federal regulations. This tactic can often result in a much larger jury verdict. Some of these verdicts result from staged accidents. Proposed legislation would protect motor carriers and insurers from the financial burdens of defending against, settling, or being found liable for fraudulent claims that result from staged collisions. In addition, it would make it a federal crime to stage a vehicle collision to get a massive award or settlement.
ROGER CERVENKA, FLEET RESPONSE: Irresponsible trucking companies or drivers putting the public at risk of avoidable accidents. Occasionally, you see companies that don’t do a thorough job of vetting drivers, providing inadequate training, or skipping vehicle maintenance. These are all avoidable errors. You may not be able to avoid all of the accidents that occur on a daily basis, but we can certainly decrease avoidable accidents by putting a bigger focus on training, compliance, and ensuring vehicles are safe for roadway operation.
Kristina Ashcraft is corporate vice president at MC Consultants, Inc. kristina.ashcraft@mcconsultants.com
Roger Cervenka is vice president of client services at Fleet Response. rcervenka@fleetresponse.com
James Foster is a partner at Cassiday Schade LLP. jfoster@cassiday.com