liability questions

[teamster]

As I have stated in other posts, I have been kicking around the idea of buying and leasing out a trailer. My question is, would it be worth it with only one trailer to form an LLC?

The other question is this: Hypothetical situation-Lets say I lease trailer to a driver who owns his own truck and god forbid he is involved in a major accident which severely injures or possibly kills someone. During the investigation it is found that trailer had out of adjustment brakes or some other malfunction that caused the accident. Suppose I had documentation of DOT inspections, PM's, and any other work done on that trailer, but driver missed something crucial during pre-trip or did not report it. Am I likely to be held liable since I am the owner or would it fall to the driver since it is their responsibility to ensure they are operating a safe vehicle. I would think it is drivers responsibility, but lawyers can accomplish many things. Your thoughts would be appreciated.

[GMAN]

I think this question would be best answered by an attorney, preferably one who specializes in transportation law. You may check with Opie on TN. You could also contact OOIDA. A local attorney would be your best choice.

I think the most expensive lawyer would win in this situation and I'm sure they would go after you and not the driver since you have the most insurance.

[GMAN]

Most of the time you should be covered by the carrier's insurance. To qualify for motor carrier authority, the carrier must carry a minimum amount of liability insurance. That should cover you should anything happen, however, when there is an accident lawyers tend to sue any and everyone and settle with who has the deeper pockets. If you do lease the trailer, you may want to make sure that you are protected with adequate insurance and that the lessee assumes all liability for maintenance and insurance. You could always require specific maintenance checks. Most carrier's will have their leased equipment DOT inspected at least once a year. With older equipment, some are not requiring inspections every 3-6 months. I would say that your greatest liability lies in someone abusing the equipment, not taking care of maintenance or theft rather than an accident. You will probably want to carry collision insurance in case of damage to the trailer.

[Sonny Pruitt]

no question you are responsible
the driver is going to blame you too.

here's the deal

I own a 94 great dane reefer for a year now.
I have sunk quite a bit of money into it to lessen the chances of malfunction.
I have replaced so far:
all the brake chambers
brakes,drums
slacks
rebushed cams
2 tires
1/2 of the hoses
still to be done
shocks
airbags(if I decide to keep it longer)
rebuild all air valves before winter

thats just the box.
any truck can pass a dot inspection
but there are so many parts to wear out on an old unit
did you ever see a trailer loose its duals?
why did that happen?
are you going to pull every wheel and change the bearings and seals?
are you going to pull the wheels and inspect each rim and lug nut?

the only way to protect yourself is to spend $$$$$$$ to avoid the accident to begin with.
and it becomes quite pricey.
so you take some calculated risks on maint
if you are the driver /owner you are up on the quirks of the unit.
but if you are renting it out, that driver will run that leaky seal until the cows come home and if it gets dry?
"they gave me a trailer with a bad seal,your Honor"

[teamster]

Thanks for the responses,so what do you think about the first question about the LLC. I would think this would give me a little more protection.

[LOAD IT]

Teamster, when you lease this equipment you will have a lease agreement that the lessee must carry in the vehicle. You can specify in the lease who is responsible for maintaining the equipment. I also agree with the poster that said the most expensive lawyer may win.

[Sonny Pruitt]

even if the lease says who is responsible for maintenance. You will still go to court. The llc will not protect you neither will an inc. You as an individual are to close to the equipment. Its just you and the trailer no legal entity can separate you.
eg
Judge "who is the head of maintenance in your co?"
"er I guess me your honor"
who is in charge of renting out the trailer?
"er I guess me your honor"
who is in charge to make sure that the trailer is properly maintained?
"well you see I have a paper,the renter is supposed to check......"
I ask you again who is the head of maintenance in your co?
"me your honor"
If the trailers brakes freeze up in -0 weather and you get slammed in the rear, you better call a lawyer.
you are still the owner and it could be your fault for leasing a trailer to someone who is a bad pre trip inspector.

[beachbum2]

I personally wouldn't want to loose sleep at night wondering who would bear the brunt of the lawsuit, for a few extra bucks. I would check with my insurance carrier and join OOIDA if you haven't yet, they can give you sound advice.
Get everything IN WRITTING.

[Bigmon]

That's why you have liability insurance. To cover these things.

[yoopr]

If for some reason a scenario like this did happen I guarantee Lawyers were going to go after Everyone Involved.

[teamster]

I would like to get some qoutes on insurance, considering I only own the trailer what would you guys suggest as a minimum. I know I need liability insurance, but what else do you suggest.

[GMAN]

It is the responsibility of who has the authority to provide the liability insurance. I am not sure you can get liability on a trailer without having authority. I suggest calling OOIDA and talk to their insurance department, and perhaps their business services department. They are a good resource. They offer competitively priced insurance for 18 wheelers. Perhaps they know of a supplemental policy that you can buy. You can specify in your lease who is responsible for maintenance, insurance, etc., You can also make sure that they bring it by for you to inspect on a periodic basis, if you want. You could also set the lease up where you take care of the maintenance yourself. That way you will make sure the maintenance is done when needed.

[Sonny Pruitt]

Just remember that it costs $$$$$$$$$ over and over to keep your truck out of trouble.
and start up repair could be considerable.(to avoid liability problems)
especially when you plan to rent it.
Make sure you consider this when you "work the numbers"
(also if a guy has a "rental" don't expect him to use his tractor brakes)

[allan5oh]

You know what, going into court and pointing to the driver is going to make you look really bad. The only way you could win something like this is if you and the driver stood together, and tried to point out that it was something freak that neither of you could've done anything about.

For example, what if somebody had the hub apart, put in new bearings/races/seals, and set the wheel bearing wrong? You or your driver have absolutely no way in checking how tight the bearing is, and you probably wouldn't know how either. Hell, the DOT wont even check something like that.

[teamster]

Thanks, Gman- so I guess all I need is physical damage insurance and maybe a supplemental liability plan if offered, correct?

[GMAN]

All you really need is collision insurance. You could add the cost to the rental and pass the cost along to the leasee.

[teamster]

sorry for the basic questions, but just trying to learn before I jump in. Now, will the carriers cargo insurance cover a load if the unit takes a crap and the load spoils. The reason I ask is I am planning to maintain the unit.

[Sonny Pruitt]

good question

reefer loads can be VERY expensive eg a 40# box of frozen lobster is $500
there are tattle tale thermometers on a lot of loads if the unit cannot hold temp the whole load can be refused ( that freaking lobster better read at least 0 and on the fourth of July)(there is very little fluctuation allowed with produce thats why I dont haul it I dont want a claim)
but if there is a claim or refusal.......guess what
my deductable for breakdown insurance is $2,500 with ooida and it has to be inspected by a certified mech every 30 days which sucks

there are a lot of things that can go wrong with a reefer
thats why I only run mine 2 days a week and look for dry loads the rest
belts(wait til you see the crazy Carrier set up)
clutch
motor mounts ( a loose mtr mount will shake your lines to breaking point)
wiped out "o" rings from low sulfur fuel
unable to hold temp in very hot weather
fan hub
running hot
low freon
no freon will wipe out a very expensive compressor.
and the load

Beware
You are entering the big leagues.

Just imagine that you are the one leasing the reefer
and it breaks down
with 40,000# of frozen shrimp.

I would suggest a 1 mil umbrella policy on your house.

[teamster]

Thanks for the info Sonny. The unit will be ran somewhat the same as yours. Eg: Load of produce, flowers, etc from Florida to somewhere north-then dry load back to Florida. whats the deal with the umbrella on the house. Never heard of this-why do I need it and whats the cost. Thanks