There’s hardly a worse omen for an owner-operator than a “declined” notice on a company-issued fuel card. When a truck fleet is having trouble keeping up with payments, the fuel company is usually one of the first creditors to cut off the supply. The insurance company may soon follow. Owner-operators may find themselves caught between a rock and a hard place if the trucking company they’re contracted to holds their policy and goes bust while they’re out on the road. With the recent rash of carrier bankruptcies and policy cancellations due to the tightening of the insurance market, owner-operators can find themselves feeling stranded, not knowing with any degree of certainty that the vehicle they’re responsible for is insured.

In many cases, there’s no obligation for anyone to tell them. Canadian law requires insurance providers to give clients five working days written notice before suspending coverage if the advisory is hand-delivered and signed for, or 18 days notice of cancellation by registered mail. That should give the fleet adequate opportunity to call the trucks back in.

But if you’re an owner-operator, it can be hard to know when the five-day clock starts ticking. If you ask, you’re not going to get an answer: privacy laws prevent insurance companies from divulging information to anyone but the company whose name is on the actual policy. An owner-operator would have no right to information about the carrier’s insurance policy.

However, that shouldn’t keep you from trying to gather information before the need arises, says John Oldfield, a loss prevention specialist with insurance broker Dalton, Timmis, Jennings in Hamilton, Ont. “Ask the carrier for a certificate of insurance now,” he suggests as a first step. “At least that way you’ll know who the broker and the underwriter are.”

Don’t confuse the certificate of insurance with the proof of insurance, the “pink slip.” The certificate names the insurance company and the broker, and lists the inception date of the policy and the policy number along with details of the type and scope of coverage the carrier has. It should also have phone numbers for these companies.

Another strategy is to ask to be added as an “additional insured” to the carrier’s policy, says Nora Hillyer, vice-president of underwriting for Markel Insurance Co. of Canada. Being added as an additional insured means being named specifically on the policy, which gives an owner-operator more recourse in asking about the status of the policy. “All owner-operators in Quebec are listed as additional insureds under Quebec law,” she says, “but that’s not always the case in Ontario [or elsewhere].”

The Canadian Bankruptcy and Insolvency Act offers little help. The law prevents an insurer from canceling policies until it has been notified by the appropriate party that all vehicles are off the road and parked. But it doesn’t speak to a policy cancellation because of defaulted payment, or non-disclosure of details. In both cases, the appropriate notice would be given, but if the policy lapses before you’re home, you could be without liability coverage. Some insurance brokers might be able to write something temporary to get you home, but you’d be buying the coverage yourself, assuming the carrier is insolvent.

There is a dim light at the end of the tunnel, but only in the United States. Under the MCS-90, a regulated U.S. insurance form, insurance companies must provide 30 days notice before cancellation. Even if the fleet chains the gates, the insurance coverage would be in effect for 30 days after the cancellation notice comes down. That should get you back into Canada from the United States, but the problem of coverage will crop up again as soon as you cross the border.

You’d be wise to ask your carrier what the outcome might be if the unspeakable were to happen. And don’t accept, “It’ll never happen here” as an answer. Driving a commercial vehicle without liability insurance carries a stiff penalty, but that’s nothing compared to what might happen if you’re involved in an accident.

SIDEBAR:

With the number of carrier bankruptcies today, and the number of insurance companies who are withdrawing from underwriting truck insurance, it’s prudent to start taking steps to protect yourself in the event of a business failure or insurance cancellation. Here’s what to do:

1. Verify the end-date on the proof-of-insurance card, and don’t leave home with a soon-to-expire pink slip.

2. Ask to be named as an additional insured on the carrier’s policy. That gives you more right to ask the insurance company about the carrier’s policy.

3. Inquire about your carrier’s safety rating. If the carrier is on the conditional or unsatisfactory list, be ready for cancelled insurance.

4. Ask for a certificate of insurance, which names the insurance company and the broker, the inception date of the policy and the policy number, along with details of the type and scope of coverage the carrier has.

5. If worse comes to worse, try calling the broker or the insurance company itself to ask about the status of the policy. If you receive no satisfaction from the person who takes the call, ask to speak to a supervisor. Keep kicking it up the chain of command until you get someone with the authority to answer your question, which is the responsible thing to do.