Currently, the Federal Motor Carrier Safety Administration requires commercial vehicles that engage in interstate commerce to maintain a minimum of $750,000 in liability insurance coverage. Congress passed 49 U.S.C. § 31139 in 1994 requiring that $750,000 be the minimum limit. The amount required has not changed in almost 27 years. However, in June 2020, the United States House of Representatives introduced the “Moving Forward Act” legislation that could have an impact on commercial motor carriers, claimants, and insurance companies. The “Moving Forward Act” would require motor carriers to have a minimum of $2,000,000 in liability insurance coverage.

After the Act’s introduction, it quickly passed in the House, but was dead on arrival in the Senate. However, the recent election results have increased the likelihood of the “Moving Forward Act” or a similar bill. Even though $2,000,000 is more than double the current required amount, an amount up to $5,000,000 is rumored. Either way, it appears that an increase is likely.

There are many questions, including why change the requirement now and what consequences will an increase in liability requirements have on commercial motor carriers. One reason used to support increasing the minimum limits is the increase in the amount of claims against motor carriers coupled with the surge in jury verdicts.

In 2020, the American Transportation Research Institute (ATRI) conducted a study on the effects of large legal verdicts on the American trucking industry titled “Understanding the Impact of Nuclear Verdicts on the Trucking Industry.” ATRI found jury verdicts since 2006 have skyrocketed. In 2006, only 4 jury verdicts exceeded $1,000,000. The amount increased to 26 cases from 2006 to 2010. There were 299 cases exceeding $1,000,000 from 2010 to 2018. Besides the increased number of cases, the amount of verdicts exceeding $1,000,000 also increased. ATRI found that in 2011, a jury returned a $40,000,000 verdict for a multiple fatality accident. However, in 2012, a single fatality accident generated an award of $281,000,000. Based on ATRI’s litigation database, the average jury verdict increased from $2,305,736 to $22,288,000 from 2010 to 2018.

ATRI’s report included additional factors that contributed to the rise in jury verdict amounts. These include failure by motor carriers to adhere to FMCSA guidelines and requirements. Specifically, the failure to perform background checks and conduct drug testing on drivers increased verdicts. For example, ATRI’s report found that a driver with a history of alcohol or drug use had much greater difficultly prevailing on liability even when the facts were questionable.

As a result, tort reform is not the only answer for the surge in jury verdicts against motor carriers. In fact, it may not be the answer at all. Increasing minimum liability limits will also increase the premiums that motor carriers are required to pay. The increase in premiums takes away resources that motor carriers should allocate to additional safety measures and activities. Demonstrating to a jury that a motor carrier has not only complied but exceeded the minimum requirements by the Federal Motor Carrier Safety Administration is very beneficial in liability arguments. It can also help to avoid potential “nuclear” jury verdicts.

Nevertheless, it appears that a change is likely to come in the form of increased minimum liability insurance coverage. As a result, motor carriers should be prepared to balance the costs associated with increasing their policy limits and maintaining proper safety protocols as mandated by the Federal Motor Carrier Safety Administration.

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Williams Britt
Charlotte, NC