You can be held liable if your contract hauler is involved in an accident
It’s common for businesses to hire owner/operators to haul their cargo, but without a properly written contract, these businesses can be held liable if the contract hauler is involved in an accident.
An agricultural chemical supply company, the insured, routinely hires an owner/operator to transport agricultural chemicals to their facility.
Early one rainy morning, while in route to the facility, the owner/operator lost control of his rig on an exit ramp and went off the road. The unit rolled over and struck several trees, causing the tanker to split open and chemicals to spill into the environment.
The clean-up required the excavation of approximately 700 cubic yards of contaminated soil, which local landfills refused to accept. Following an extensive search, a hazardous waste incinerator facility agreed to accept the soil and dispose of it at a cost of $500 per ton.
The chemical supply company and owner/operator had a written, formal contact in place, but the language was not written in a manner that required the owner/operator to take action for the damages that resulted from this accident. As a result, the owner of a hazardous material was held liable for the environmental clean-up.
The cost to clean up the chemical pollutant and properly dispose of the contaminated soil was in excess of $800,000.
Risk management recommendations for hauler contracts
When your company hires an owner/operator, it’s very important to have a licensed attorney review the contract to ensure proper language is in place to successfully transfer the exposure to the party that owns the equipment and is operating the vehicle.
The following requirements should be included in the contract:
- Driver qualifications
- Indemnification language
- Limits of insurance the owner/operator should carry, including workers’ compensation coverage
- Minimum CSA score for the owner/operator
When hazardous materials are involved, additional elements should be included:
- Acknowledgment of current hazardous materials endorsement
- Copy of a contact with a hazmat emergency spill response company
Learn other important tractor-trailer rollover prevention tips.