Inside Coverage Insurance Summer 2007
A publication of Great West Casualty Company
Copyright 2007, All Rights Reserved

A truck driver picks up a load in California and delivers it to Boston. Another picks up a load in California and delivers it to Pennsylvania. Neither gets paid. Both are victims of a scam. This scam targets unsuspecting trucking companies who have taken double-brokered loads from a fake trucking company or broker. In each case, the fake company collects payment for the load while the legitimate company, who actually hauls the load, gets nothing.

Great West became aware when one of its insured’s name and identity was stolen and used as part of the scam. Here’s how it works: a fake broker named Cargoland secured a certificate of insurance from our insured’s agent. Two days later, the address of the insured was changed to a mailbox in Los Angeles. Not only that, someone posing as our insured changed their address to that same Los Angeles mailbox on the FMCSA web site.

The imposter then approached two brokers and agreed to take two loads; he/she presented the brokers with the altered certificate of insurance, a company snapshot from the FMCSA web site (that now showed the Los Angeles address) and a W-9. The social security number on the W-9 was also a fake.

The imposter then “double-brokered” the load to a legitimate trucking company and offered to pay more to deliver the load. After the legitimate trucking company delivered the load, they were unable to collect payment. The telephone number they had been given went unanswered. The address in Los Angeles was simply a mailbox. The imposter collected from the broker and disappeared. Trucking companies with brokerage sides have also advised Great West they, too, have been “used” in variations of the scam. In one case, the broker gave the load to a trucking company that turned out to have been likely a phony. That trucking company then gave the load to Cargoland, who in turn gave it to a legitimate trucking company who was unaware that Cargoland did not exist. Cargoland collected, and the legitimate trucking company got nothing. In another case, our broker gave the load to a trucking company who in turn gave it to a company called Cargo-Line. In this case also, Cargo-Line gave the load to a legitimate trucking company who delivered the load but went unpaid.

Cargoland is an intricate operation. They have people who possess excellent computer skills and have an intricate knowledge of the trucking industry. They had a full-color web site with photos of its “headquarters” in San Francisco (the photo was actually that of a downtown hotel) and of its “warehouse” building in Oakland. Great West was informed that the rest of the site was mirrored. Parts of the site were lifted and stolen from other sites. The Cargoland web site has now been taken down. Furthermore, the DOT is investigating the scam and is working to prevent unauthorized changes on the FMCSA web site.

The names used by these imposters will change. They can change the names of their phony brokerages and web sites with a few keystrokes. Great West encourages its customers and agents to use caution in dealing with brokers or trucking companies with whom they are not familiar. A few extra minutes checking with the agent whose name appears on the certificate, or checking an FMCSA web site to be sure it balances with documents provided, might prevent a trucking company from falling victim to a costly and time-consuming scam.

For more information please contact Will Buell,
Great West Casualty Company, Corp. Legal Department, at 402-494-7235 or by email: w.buell@gwccnet.com.

Safety Q & A

By John Joines, Vice President, MRO Safety
As an important resource for our customers, Great West safety professionals are regularly called upon for guidance on a variety of safety-related issues. In this issue of Inside Coverage, we provide some answers to frequently asked questions.

Q: I have independent contractor drivers (owner operators). Am I required to keep maintenance files on their tractors?

A: Yes, the federal motor carrier safety regulations (FMCSR) specifically address this in Part 396 (inspection, repair, and maintenance). For every vehicle subject to the motor carrier’s control, they are required to make certain that unit is properly maintained and there are maintenance records showing regular documentation of inspections and repairs.

Q: We were shocked to have our first ever positive drug test on a driver after he failed a random drug test. Are we required to keep this driver? Are we required to send the driver to a rehabilitation program?

A: FMCSR regulations 40.23 and 40.289 indicate a driver is medically disqualified when they receive a confirmed positive drug test for the substances banned under federal regulations. Unless specified under an employment contract or a union agreement, the motor carrier has no federal regulatory requirement to maintain employment for an individual who has a confirmed positive drug test result. While the motor carrier representative is required to refer this person to a Substance Abuse Provider (SAP) for evaluation, they have no federal regulatory requirement to pay for rehabilitation.

Q: One of my friends owns a small trucking company in our area. He received notice that the federal DOT will be visiting them to conduct a safety audit within the next six months. My friend is telling me their poor Safe Stat rating prompted the DOT to take a closer look. Does Great West have anyone who can help me in understanding my Safe Stat scores and how I can target improvements?

A: Yes! Great West’s safety professionals are very familiar with the Safer System. We can provide a full review of your SafeStat ratings, look at root cause issues producing violations, and help you design a plan to reduce violations which may produce a favorable Safe Stat score.

Q: Help! These hours of service regulations are driving me nuts! One of my drivers is splitting her sleeper berth time as she did under the old regulations. Our log audit software is recording numerous violations. I really do not want to call anyone in motor carrier enforcement to ask them about this. Can Great West help me?

A: Of course - that is why we are here! The rules for split sleeper time have changed under the new regulations and are much more restrictive in how and when they must be used. For details, call our safety department and we will help you sort through these and other hours of services issues and help you devise a system to successfully audit your driver logs.

Always Report An Accident Regardless of Fault

Great West Casualty Company recently received a claim reported three months late. The accident happened in a major metropolitan area where traffic was merging for a work zone; four lanes were merging into two. Our insured was in the correct lane having merged two miles back. Two lanes over, a delivery van began to swerve into one of the open lanes causing a vehicle in the nearest lane to swerve into our insured’s lane. The vehicle slightly sideswiped the front side of the truck. The impact caused only minor damage. Both vehicles continued through the work zone and pulled over at the next exit.

Our driver approached the vehicle to make sure everyone was alright. The vehicle had four people in it; all of them told our insured they were fine. Since there were no major issues and our driver felt he was not at fault, he exchanged information with the other driver and finished delivering his load.

By the time the accident was finally reported to Great West, all of the claimants were represented by an attorney and had decided to pursue claims for personal injury in addition to the property damage. Our claims adjusters had no chance to inspect the claimant’s vehicle, contact the claimants for their accounts of the accident, or rule out injury. Our claims team was put on the defensive rather than offensive. As a result, our claims team was put in a position to deal with a case that involved additional settlement costs to several claimants for personal injury which may not have been an issue had the claim been promptly reported.

Remember, determining fault is easier said than done. Even if an accident is not your fault, the best way to protect yourself is to promptly report the claim to Great West to allow us to investigate the claim and defend you. For more information on properly reporting accidents, please contact your agent.

REPORT ALL
ACCIDENTS
IMMEDIATELY
800-228-8040
24 hours a day 7 days a week

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