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Zywave | Advisen Front Page News - Monday, July 3, 2023

I-95 catastrophe a lesson for commercial auto insureds to prepare for worst-case scenarios

I-95 catastrophe a lesson for commercial auto insureds to prepare for worst-case scenarios

By Alex Zank, Front Page News

The recent tanker truck tragedy that caused a freeway collapse in Philadelphia is a sobering reminder for commercial auto insureds to review their loss-control procedures and ensure they have adequate insurance coverage, say experts at Risk Strategies.

“There’s a $25 million accident waiting to happen every day now,” said Mike Vitulli, Risk Strategies’ national casualty practice leader.

On June 11, a tanker truck carrying fuel lost control as it was exiting the freeway and caught fire under an I-95 overpass in northeast Philadelphia. The fire’s heat collapsed the interstate’s northbound lanes and damaged the southbound lanes. Pennsylvania Gov. Josh Shapiro wrote in a disaster proclamation that the closure “created serious disruption to transportation and commerce” and that “there is concern for the public safety and well-being of all individuals in the vicinity of the incident.”

The motor carrier involved was Pennsylvania-based Penn Tank Lines. The driver, Nathan Moody, died in the incident. State officials reopened six lanes of traffic the morning of June 23. In a statement on its website, Penn Tank Lines wrote it was “devastated” by the tragedy.

“As a family-owned business with a presence in the region for nearly 50 years, safety is at the forefront of our work, and we are committed to being part of the solution to this challenging situation,” the company wrote.

The I-95 collapse is an extreme example of the potential consequences of trucking accidents, of which there are approximately 388,000 each year, according to the experts at Risk Strategies. Vitulli estimated this type of incident would likely impact workers compensation and auto policies and involve third-party claims for bodily injury and property damages. There could also be long-tailed environmental claims related to fuel pollution, according to Joe Quarantello, national environmental practice leader at Risk Strategies.

Chemical runoff from this type of incident creates short- and long-term environmental liability, said Quarantello. Responsible parties will likely pay to remediate any contaminated soil and polluted groundwater.

“There could be pump-and-treat systems and years of monitoring,” he explained. “It could be years before they get complete regulatory closure. And so, anytime they have an overturned vehicle, they’re going to be spending a significant amount of money just on the remediation alone. … You can put numbers around a remediation project based on your findings from testing, but the unknown is bodily injury and property damage type claims [from runoff].”

One thing that needs sorting out is who is liable, Vitulli told Front Page News. The company that owns the vehicle, the company driving the vehicle, and any intermediary that connected the driver with the vehicle owner may all share responsibility.

“There will be some sorting out that goes on, and [figuring out] who has the deepest pockets,” he said.

To minimize the chance of catastrophe, commercial trucking companies should invest in driver-safety training, technology such as dash cameras, and other loss control measures, according to Vitulli.

“First and foremost, make sure you’re putting a qualified person behind the wheel,” he said, acknowledging the industry faces a shortage of skilled drivers. “It gets harder and harder, but if you’re driving around with thousands of gallons of fuel oil, it’s incredibly important.”

Companies must also properly maintain their vehicles. “It gets harder and harder to insure a company that has a poor maintenance record,” Vitulli said.

Insureds should review trends in claims data when determining appropriate coverage levels. Claims once totaling hundreds of thousands of dollars may now average in the tens of millions, thanks to social inflation, he said.

Organizations’ crisis management teams must prepare for worst-case scenarios.  “You need all the resources that your risk management team can pull together,” Vitulli said. “Companies may not be prepared for that situation.”

Reporter Alex Zank can be reached at alex.zank@zywave.com

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