Greetings

Dear Readers:

It’s hard to believe we are at the beginning of the holiday season. It’s been a challenging year, and while it’s natural to remember the things we have wrestled with — and to focus on and plan for the wrestling matches to come — we think the upcoming holiday season gives us a great opportunity to recognize and be thankful for the blessings that have come our way this year.

• First and foremost, we are incredibly blessed to have our great and loyal customers, who continue to entrust Cline Wood with their insurance programs. We appreciate all of you. We know how difficult this economy can be, and we applaud your efforts to keep moving forward.
• We are blessed by the great employees that make Cline Wood special. They are working harder than ever for you and for us. We value them more than we can say in this space.
• We appreciate our insurance companies and other industry partners. They provide us with excellent products and services that make it possible for us to do our best for our customers.
• We are grateful for this wonderful country we live in and all the blessings we have as citizens of the United States of America. This is the greatest country on earth, and we are blessed to be here.
• Our eternal gratitude goes to all those brave and selfless citizens who have put their lives on hold — and put their lives on the line — to serve in our military forces. They are the heroes that protect the freedoms and way of life that we all enjoy.
• Last, but not least, we are grateful for the knowledge that this economy will eventually begin to grow. There are encouraging signs, and we hope 2010 will be a better year for all of us.

That’s an awful lot to be grateful for, and we are truly blessed. We hope you and your loved ones are each equally blessed, and have a very happy and safe holiday season. We wish you all the very best and, once again, we thank you for your business.

Sincerely,

John Cline and Mike Wood, Founders

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What's New

Cline Wood employees recently received the following designations:

• Gary Coady, vice president – agribusiness: Agribusiness Farm Insurance Specialist (AFIS).
• Valerie Walker, account manager: Certified Insurance Services Representative (CISR) through the National Alliance for Insurance Education and Research.
• Skip Wombolt and Marshall Sherlock, producers: Specialist in Transportation and Risk (STAR) through Great West Casualty Company.

Cline Wood is holding a holiday food drive at its headquarters location in Leawood, Kan., to benefit Harvesters Community Food Network. Employees are collecting canned and boxed food Nov. 9-Dec. 18. Harvesters’ agencies provide assistance to nearly 60,000 people in the Kansas City metropolitan area every week.

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Out and About

If you’re at any of these events, please stop by to see us:

Nov. 18-19: Kansas Agri Business Expo, Wichita, Kan. — Gary Coady, vice president –agribusiness, and Matt Koster, producer.

Dec. 3-4: Kansas Livestock Association Annual Convention, Wichita, Kan. — Gary Coady, vice president – agribusiness; Mike Young, producer; Peter Fish, producer; and Matt Koster, producer

Jan. 6-7: Missouri Agribusiness Winter Convention, Lake of the Ozarks, Mo.

Jan. 12-13: Rocky Mountain Agribusiness Association Annual Convention & Trade Show, Denver, Colo.

Jan. 27-30: National Cattlemen’s Beef Association Annual Convention & Trade Show, San Antonio, Texas.

Feb. 28-March 3: Truckload Carriers Association Annual Convention, Las Vegas, Nev. — Tom Dickmeyer, CEO.

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The Faces of CWA

Meet Dawn Perry
Middle Market Unit Manager

With 19 years of service under her belt, Dawn Perry, middle market unit manager at Cline Wood, knows a lot about customer service. She believes in a personal touch.

“I do my best to go out and visit my customers and spend one-on-one time with them to hear their concerns, find out how their business is going and see how Cline Wood can help them be successful,” she says. “I enjoy meeting my customers in person, so that I’m not just a voice on the other end of the phone.”

Dawn and her team members service companies with five to 50 tractor trailers. They answer questions, provide insurance quotes, handle renewals, help with claims and talk to insurance companies on behalf of their customers. With a background in education, Dawn also provides training for Cline Wood new employees and producers.

But Dawn’s commitment to the transportation industry goes beyond her job. She also participates in activities on her own time. For the last 15 years, she has acted as a team captain during the Missouri Motor Carriers Association Truck Driving Championships. She also has taken part in Truck Driver Appreciation activities, going to weigh stations to hand out bottled water and doughnuts, and thanking truckers for their work.

She is especially happy to be associated with Cline Wood for so long. “I believe I work for the best people in the insurance industry,” Dawn says. “Our leaders are dedicated to making Cline Wood the best insurance agency there is. They hire the best people and provide the technology, training and expertise to ensure we succeed.”

Although Dawn works in Cline Wood’s headquarters in Leawood, Kan., she is a huge St. Louis Cardinals fan. In addition, she enjoys spending times with her family and friends, fishing with her brother and nephews, attending her nephews sporting events, and vacationing with her family.

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Transportation

The Safety Zone
A look at safety issues by David DeBolt, Vice President – Risk Services

You win some, you lose some, some get rained out, but you suit up for every game…

As many of you are aware there is a major revision coming from the Federal Motor Carrier Safety Administration (FMCSA) affecting how the safety performance and safety fitness of motor carriers will be evaluated. This initiative, called CSA 2010, has been a work in progress since 2005 with initially four states being designated as testing or prototype states. In February 2008, Missouri became one of the first four states, with Kansas coming live just recently. Activation in the remaining states will start in June/July 2010 and will be a phased in process, but we don’t have a detailed schedule.

There are many characteristics of CSA 2010, but, I’m going to hit on some of the factors that directly and firmly bear on you as a motor carrier, your drivers and your safety fitness:

• It’s important that you become knowledgeable of exactly what CSA 2010 is. There have already been several presentations put on by the FMCSA, vehicle enforcement agencies, state trucking associations, insurance companies and consultants. There will be more! I strongly urge you to attend a presentation. Owners, CEOs, operation managers and safety personnel should attend.
• The data for this new system comes from the same sources FMCSA uses now — roadside inspection, traffic enforcement and crash data — but that data is manipulated and evaluated much differently than the current SafeStat Online/SAFER information we are used to. Because of this, drivers will come under more intense scrutiny. For the first time their official performance will be evaluated.
• Sometime in the future that driver data may be available to motor carriers and could be used as part of your hiring process.
• After all your individual data is evaluated, punched, prodded and dissected, the end result may place your company in line for what is now called an “intervention.” Currently this is a compliance review, but under CSA 2010 there are different levels of “intervention.”
• Receiving a warning violation will be weighed against you and or your drivers. In the past only out-of-services counted, but now warnings will have some weight in the calculations.

There are several bottom-line messages I’m hoping you will take from all of this:

• Find out all you can about this new regulation; it affects your operation.
• The FMCSA/CSA web site is an excellent starting point for information.
• Your data from roadside inspections, enforcements and crashes for the past 24 months is being evaluated now. It may not be published, but we’ve been told enforcement folks can access it. Your drivers' performance is now much more important. If your drivers continue to get speeding warnings/citations or are placed out of service for HOS violations, they will count heavily against you in the evaluation process.

On another subject near to my professional heart, did you hear that the FMCSA — capitulating to political pressure — is voluntarily going to produce a new rule-making on the current Hours of Service regulations. This was not from any court-related finding; out of the clear, blue sky the administration announced it. It will be a long process, so stay tuned as no one knows what the result will be.

If you have questions please contact me at (913) 319-3431 or daved@clinewood.com.

Related industry article:

A recent article in the American Trucking Associations' "Truckline" newsletter addresses the Hours of Service regulations. Read more in this article.

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Challenges to Independent Contractor Status from Lease-Purchase Agreements
by Tom Dickmeyer, CEO

The following article ran in the most recent issue of “Truckline,” the American Trucking Association’s (ATA) e-mail newsletter. It outlines the key role a lease-purchase agreement played in the Arkansas Workers’ Compensation Commission ruling that certain owner-operators were, in fact, employees. This finding will influence the workers’ compensation premiums the trucking company pays. In addition, it could have serious tax implications including the possibility of owing back taxes and penalties.

Another challenge was mounted in Missouri some time ago saying that owner-operators who were on a lease-purchase plan were, in fact, employees. The basis was the fact that the trucking company maintained ownership of the trucks being purchased until the truck was paid off. The contention was that since the owner-operator did not own the truck and the truck company did own the truck, the driver must be an employee.

There continue to be ongoing challenges to the independent contractor status, and it is vitally important that you take all the variables into consideration if you are utilizing owner-operators. A lease-purchase plan can be a very good thing for both the trucking company and the independent contractor that enters into the agreement. Before putting a plan of this sort or any other plan impacting your owner-operators into motion, make sure you involve a transportation attorney who specializes in the ever-changing dynamics of independent contractor status.

Owner-Operator Reclassification Affirmed in Arkansas Workers’ Compensation Case

The Arkansas Court of Appeals affirmed an Arkansas Workers’ Compensation Commission ruling that owner-operator drivers had been misclassified as independent contractors. Although several facts supported their independent contractor status (including the contractors having obtained certificates of non-coverage from the Commission), the court found that it could not “say that there was a lack of substantial evidence supporting the Commission’s conclusion.” The court found particularly relevant restrictions in a lease purchase agreement through which the owner-operators leased the vehicles from an entity related to the motor carrier. The court noted that these leasing agreements required, among other things, that the contractor operate the truck under the related-entity’s direction and under the motor carrier’s operating authority, that the driver may not assign the agreement or sublease the truck and that the driver had to have the truck serviced by a mechanic approved by the leasing company. Steinert v. Arkansas Workers Compensation Commission, 2009 Ark. App. 719 (Nov. 4, 2009).

Reprinted with permission from the American Trucking Association

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Get Ready for Winter Driving
by Cheryl Fennesy, Vice President – Transportation

In many parts of the country, winter-like weather has already reared its ugly head, and it’s coming to many more as the days get shorter and colder. Get ready with these tips:

• Be prepared. Although the weather may be nice when you begin your trip, you never know what you will run into on the way. Some things to bring along:
  • Additional clothing, extra gloves, rain gear, etc.
  • Flashlight, blanket, food, water.
  • Bag of sand or salt.
  • Windshield scraper, jumper cables, tire chains or traction mats.
• Check your tire pressure. Tire pressure drops by about one pound per 10 degrees of temperature. Your tire pressure can get dangerously low as the temperatures continue to drop, which can make it difficult to handle your truck.
• Test your battery and charging system. You may not have had a problem starting your vehicle in warm weather, but winter weather can cause a poor battery or charging system to fail. Get it tested now, and if there’s a problem, get it fixed or replaced. You’ll be glad you did when your vehicle cheerfully cranks up on cold winter days.
• Make sure your antifreeze will protect your vehicle in the winter temperatures in your area. For most areas, a 50-50 mix of coolant to water is appropriate. The 50-50 mix has a lower freezing point than 100 percent coolant, and it’s better able to transfer heat away from your engine, so don’t try to increase coolant thinking it will be better for your vehicle. Use the mix that is recommended for the areas in which you’ll be driving.
• Replace your windshield wipers. If your current wiper blades don’t clean the windshield well, it’s time to get new ones. Windshield wipers get a workout during the winter, even when there’s no precipitation — cleaning away melting snow and slush.
• Fill your windshield washer reservoir, and carry extra fluid with you. Make sure you use good windshield washer fluid, because you don’t want it to freeze on your windshield. If you drive in very cold areas, you might have to supplement your fluid with concentrate.
• Keep an eye on your gas gauge. You should try to always have at least a half tank of gas during winter driving to get you through any delays you may encounter and to keep your tank from freezing.

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Practice Caution when Driving in Bad Weather
by Cheryl Fennesy, Vice President – Transportation

In addition to having your vehicle ready for winter driving, you also should be prepared to practice a different style of driving. Here are some tips:

• Slow down when the weather or road conditions are bad so you have time to react.
• Allow more room between yourself and other vehicles.
• Hold your steering wheel firmly to keep your vehicle steady.
• Brake and accelerate lightly.
• Use caution when approaching bridges, which usually freeze first.
• Watch for black ice. The following warning signs might clue you in that black ice is ahead:
  • Ice build-up on your mirror arms, antenna or tops corners of your windshield may point to freezing conditions.
  • If spray from tires on the vehicles in front of you stops, it may indicate the wet pavement is turning to ice.
• Be extra careful on mountain driving. Be ready for wind gusts and listen for emergency vehicles and snowplows.
• If you are stranded or stuck during a bad storm or blizzard and you can’t see a nearby place to seek assistance, stay in your truck. To avoid carbon monoxide poisoning, keep your exhaust pipe clear of snow, and open a downward window slightly for ventilation. Run your engine for only 10 minutes each hour, and use your emergency blanket and clothing to keep warm.

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'Giving' of Loads: The Good, the Bad and the Ugly
by Karen McCarthy, Assistant Vice President and Senior Legal Counsel, Great West Casualty Company

Like the classic Clint Eastwood movie, “The Good, the Bad and the Ugly,” motor carriers “giving” loads to other motor carriers can bring surprises and unintended consequences. Let’s look at a possible scenar io.

Xample Motor Carrier has no brokerage operation. It cannot haul all of the loads offered to it so it may occasionally, or routinely, “give” loads to an owner/operator who has no authority or to another trucker who has motor carrier authority. This “receiver” of the load is identified as “Y Not Trucker.” Xample Motor Carrier believes it is doing a favor for Y Not Trucker. (This is the “good.”)

The shipping receipt or Bill of Lading is in the name of Xample Motor Carrier, and Xample Motor Carrier receives payment from the shipper for the haul. Xample Motor Carrier then pays over to Y Not Trucker all or some of the payment Xample Motor Carrier received. (This is the “bad”.)

Xample Motor Carrier has unknowingly increased its exposure to workers’ compensation claims (the “ugly”) as illustrated by the following two examples:

1. If Y Not Trucker is an individual owner/operator with no authority, the risk is that if an owner/operator is injured or killed while hauling the load, the owner/operator or his family will file a workers’ compensation claim claiming that the owner/operator was really an employee of Xample Motor Carrier, and not an independent contractor. There is a trend in several states to eliminate the misclassification of employees, and an independent contractor performing the same type of work as the general contractor is routinely found to be an employee for workers’ compensation purposes.
2. Y Not Trucker is another motor carrier who does not have a workers’ compensation policy. The driver hauling the load given to Y Not Trucker by Xample Motor Carrier is injured or killed. The driver or his family files a workers’ compensation claim against Xample Motor Carrier claiming that the driver was a “statutory employee” of Xample Motor Carrier since Y Not Trucker was hauling for Xample Motor Carrier, and Y Not Trucker had no workers' compensation insurance. Statutory employer laws make the employee of a subcontractor an employee of the general contractor when the subcontractor has no workers’ compensation policy.

Motor carriers need to be aware of these situations so they do not unknowingly increase their workers’ compensation exposure and their cost of doing business, i.e., premium audits of insureds with such exposure will pick this up.

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Agribusiness

Beware of Increase in Dryer Fires
by Gary Coady, Vice President – Agribusiness

Photo courtesy of Mike Christopherson, managing editor, Crookston Daily Times.

Harvest 2009 is finally underway. We haven’t seen the weather conditions of this year’s harvest for a long time, if ever. The grain industry has gotten used to three or four weeks of grain drying and then shutting down the dryers for the year. This year will require a lot more care and maintenance because many of you will dry a significant amount of the grain you take in.

Because of the wet year we’ve had, we have already seen an increase in the number of dryer fires for commodities such as corn and soybeans. Potential causes and fire-fighting errors included:

• A vaporizer malfunction.
• Dryers operating at too high of temperature and at slow speeds.
• High moisture corn not flowing as normal, causing the grain to overheat.
• Fines and “bees wing” accumulation on burners due to very wet corn.
• Dryer sheets plugged with accumulation of material.
• Difficulties with fire-fighting equipment allowed fire to get out of control.
• Emptying the dryer completely during a fire, causing a chimney effect leading to the dryer becoming a total loss.

Please refer to your dryer manufacturer for specific maintenance and fire-fighting recommendations, but here are some tips that may be helpful:

Seasonal inspection and service

• Follow lubrication guides as outlined in the lubrication table.
• Do not let grain fines and dust accumulate inside the cooling section or heat section of the dryer.
• When cleaning the dryer, check the grain discharge area.
• When the dryer is restarted, make sure all grain columns are evenly unloading.

In case of fire

• When you first detect a fire, shut down the entire drying operation.
• Do not try to cool a fire by running fans.
• Never run grain from the dryer into the elevator or storage.
• Locate the area of the fire.
• If the fire can be extinguished with a fire extinguisher, water hose or by removing the burning material, this should be done right away.
• If it is necessary to emergency dump contents from the dryer wait until the fire department is on site.
• A fire extinguisher should be located at or near the dryer.

Most grain elevator employees are not firefighters and do not have the proper equipment to fight fires. Grain dryers are a vital part of grain operations, but it is not worth someone getting hurt or killed trying to save a grain dryer.

Parts of this article have been reprinted with permission from the Grain & Feed Association of Illinois.

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