Don’t Forget About the Broker

August 23, 2021 Vehicle Wrecks

Trucking accidents differ from car collisions. In a head-on car crash involving two average passenger vehicles traveling at the same speed, the occupants of both cars may be susceptible to sustaining equally extensive injuries. On the other hand, when a tractor-trailer collides with a passenger vehicle, the injuries are disproportionate. In a trucking accident, the impact will generally cause more serious damage to the passenger vehicle and its occupants than to the driver of the 18-wheeler. The reason is obvious. Tractor-trailers weigh about 20 times more than a typical passenger vehicle!

Liability limits on commercial motor vehicle insurance policies are usually up to $1,000,000, whereas coverage on personal auto policies generally maxes out at $500,000 – and many Texas drivers have only $30,000 in coverage (as part of a 30/60/25 minimum limits policy). If your client a truck accident lawyer representing truck accident victim who has sustained life-threatening injuries and will require extensive and expensive medical care, one million dollars will be inadequate.

As you begin your search for all liable parties and additional sources of insurance coverage, it can be easy to overlook the area of broker liability. Don’t forget about the broker.

Broker liability may provide additional sources of recovery for your client.

A broker is the “middle man” between the shipper and the trucking company or the owner-operator driver. In return for compensation, a broker will arrange or offer to arrange the transportation of goods by an authorized motor carrier. 49 C.F.R. § 371.2(a). Although the broker connects the shipper with the motor carrier and their agents, their involvement will differ on a case-by-case basis. Some brokers may negotiate or set the price of the goods being shipped; others will guarantee the delivery of the load.

Under the United States Code, a broker is defined as “a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for sale, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by a motor carrier for compensation.” 49 U.S.C. § 13102(2). A motor carrier is “a person providing motor vehicle transportation for compensation.” 49 U.S.C. § 13102(14).

Even if a broker does not own or lease the tractor-trailer involved in the trucking accident, a broker can still be liable if it acts as a motor carrier. Further, there may be liability on the broker for its own conduct.

The broker may be liable if it acts as a motor carrier.

You must first determine whether your client’s trucking accident involved a broker of the cargo. If a broker is involved, you must then evaluate whether the broker assumed the responsibilities of a motor carrier within a transaction.

As mentioned, a broker will not escape liability merely by asserting that it did not own the tractor-trailer involved in the trucking accident. A broker will generally be considered a motor carrier when it guarantees the delivery of a load. Under Title 49 Section 371.2(a) of the Code of Federal Regulations, “[m]otor carriers, or persons who are employees or bona fides agents of carriers, are not brokers within the meaning of this section when they arrange or offer to arrange the transportation of shipments which they are authorized to transport and which they have accepted and legally bound themselves to transport.” Therefore, a broker who has motor carrier authority may not maintain its status as a broker if it guarantees delivery of a load.

The broker may be liable for its own conduct.

A broker will not escape liability merely by delegating performance to a trucking company and can be held liable for its own negligent conduct. Restatement Second of Torts Section 411 provides that brokers are liable for “physical harm to third persons caused by [their] failure to exercise reasonable care to employ a competent and careful contractor (a) to do work which will involve a risk of physical harm unless it is skillfully and carefully done, or (b) to perform any duty which the party owes to third persons.”

Brokers, like all lines of business, have the interest to keep costs down. To do so, a broker may hire low-cost trucking drivers. This decision comes with great risk. Brokers have a duty to ensure they are not hiring unsafe trucking companies or owner-operator drivers to transport the cargo. Brokers may be liable for a trucking accident if they fail to check the safety record of the trucking company or owner-operator driver they hire. Hiring an owner-operator driver with a poor safety record or a trucking company with a history of trucking accidents will aid in proving negligent hiring.

As a best practice, you should propound discovery requests early on to discover the owner-operator driver’s or trucking company’s safety violations and the steps, if any, that the broker took to make sure it was hiring a safe trucking company or owner-operator driver. Identifying all liable parties is essential in all cases, especially in a trucking accident where a one million dollar policy will not adequately pay for your client’s extensive treatment and damages. As you’re evaluating every aspect of your case, leave no stone unturned and examine the involvement of a broker and broker’s insurance. Search for any other liable party, such as the shipper or the truck equipment manufacturer, and their insurance coverage.

Attorney Terry Bryant

Attorney Terry BryantTerry Bryant is Board Certified in personal injury trial law, which means his extensive knowledge of the law has been recognized by the Texas Board of Legal Specialization, setting him apart from many other injury attorneys. The 22 years he spent as a Municipal Judge, Spring Valley Village, TX also provides him keen insight into the Texas court system. That experience also helps shape his perspective on personal injury cases and how they might resolve. This unique insight benefits his clients. [ Attorney Bio ]

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