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I once asked a potential client how much he paid for the last book he purchased. His response was $25. I then asked him if he read it. His answer was yes. I then asked if he read his cargo policy and he said no. I pointed out that he paid $25,000 for this policy, which contained less than 5 percent of the words in the novel, so why hadn’t he read it? His reply was “it was too difficult to understand.”
There are millions of people out there who just don’t read manuals, no matter what they’re for.
Any buyer of a motor truck cargo or warehouseman’s legal-liability insurance policy who does not take the time to read it will, at some point, generally after a major loss, regret not having done so.
All states regulate the sale of insurance. State insurance “departments” control policy language and pricing of most insurance policies. However, not all insurance is subject to the same degree of regulatory control, with one exception being Marine Insurance, both ocean and inland.
Motor truck cargo and warehouseman’s legal liability are classified as commercial inland marine (CIM) and both policy forms are “free of rate and form filing.” Inland marine underwriters are free to write their own terms and conditions (generally referred to collectively as “proprietary coverage forms”) and to charge what the market will bear.
Think of them this way; the essential difference between outerwear and clothing is that outerwear comes “ready-to-wear” while clothing, to fit right and look good, requires the services of a tailor. Motor truck cargo and warehouseman’s legal-liability insurance policies require the services of a “tailor,” in this case an insurance agent or broker, to “custom-fit” it to properly cover the buyer’s exposures.
This can be good or bad. Meaning that the insured literally gets what he pays for with these policies. The good news is that whatever coverage an insured needs can usually be supplied, albeit for a price. Conversely, whatever coverage the underwriter wants removed, can also be removed. This freedom means motor truck cargo and warehouseman’s legal-liability insurance policies, while preprinted by the insurance companies for their convenience, are at least theoretically, modifiable and therefore more susceptible to errors in “tailoring.”