How much Umbrella Liability or Excess Liability Should a Motor Carrier Have?

The rule of thumb in risk management is to carry - at a minimum - enough liability insurance to protect your net worth should a large claim arise. Many motor carriers have a false sense of confidence in their company's LLC or separate "holding" entity in that it will protect the company from the operating company (trucking operation).

We are dealing with a claim now whereby the motor carrier had only a minimal amount of liability ($2MM) and the claim is in excess of $20MM. The plaintiff is now trying to penetrate the LLC (where the assets are held) with an "alter ego" claim. In laymen's terms an "alter ego" claim is made when the plaintiff feels the defendent shucked their responsibility to the public (liability wise) by not properly insuring and "hid" assets in another entity.

Don't get caught up in the herd mentality of "most motor carriers only carry $1MM, so that's what I will do", as everybody's operation and assets are different. It could come back and bite you if you are not properly prepared.