Two separate trucking accidents caused major spills of tomatoes and Alfredo sauce onto highways on different sides of the U.S. within hours of each other in late August, Today reported. The first incident took place Aug. 29 in Vacaville, California, when a big-rig truck went through the center divider and crashed, injuring three individuals and spilling more than 150,000 tomatoes across multiple lanes, which shut down one lane of traffic for at least six hours. The next day, one woman was injured and traffic was delayed after an 18-wheeler hauling hundreds to thousands of jars of Alfredo sauce crashed in Memphis, Tennessee, spilling sauce across all lanes and requiring hours of cleanup, according to reports.
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Social media has, in some cases, introduced humor into serious incidents by turning losses into memes, despite the fact that such events have resulted in significant injuries and could have led to fatalities. Beyond the immediate harm, these high-profile incidents can negatively impact the reputation of the transportation industry as a whole.
At the same time, transportation companies continue to face mounting challenges, including the threat of nuclear verdicts, driver shortages and employee retention concerns. Major accidents also contribute to rising insurance costs, affecting essential coverages such as Truckers Auto Liability Insurance, Transportation Pollution Liability Insurance, Motor Truck Cargo Insurance, Auto Physical Damage Insurance and Excess Liability Insurance.
“As loss severity increases, there is likely some mistrust in how these operations are managed and then, of course, insurance carriers are responding with increased rates,” said William Mills, Director, Transportation, Burns & Wilcox, Salt Lake City, Utah. “This increases the cost of commodities as the costs per load increase. It is just a ripple effect.”
Environmental damage can ‘dramatically’ increase accident costs
Following a trucking spill, potential expenses can be extensive, including cleanup costs, third-party property damage and bodily injury, natural resource damages, regulatory fines and penalties, vehicle repairs and more. While spills involving less hazardous materials, such as food products, may result in lower cleanup costs, incidents involving hazardous substances can be significantly more severe.
For example, a 2019 oil tanker spill in Ukiah, California, resulted in enforcement costs and penalties totaling $90,000 after thousands of gallons of oil were released onto roadways and nearby land connected to a creek. In another incident, a transport truck accident in Kingston, Ontario, led to a fertilizer spill that temporarily shut down a major highway exit.
Spills involving hazardous materials can dramatically increase cleanup, Liability and pollution exposures, potentially requiring evacuations and resulting in environmental contamination, including impacts to the water table. These scenarios introduce a far more complex and costly set of consequences, underscoring the importance for trucking companies to carry adequate Liability limits based on the commodities they transport and to ensure sufficient coverage is in place to respond to large-scale incidents.
Even materials that are not considered hazardous, such as Alfredo sauce, can cause environmental damage in a spill incident, Mills pointed out. “With dairy being the main ingredient in Alfredo sauce, it can be a pretty intensive environmental cleanup operation depending on where the spillage occurred,” he said. “If there was any drainage into the water systems, the cleanup costs could escalate dramatically.”
While a transportation company’s Trucker’s Auto Liability Insurance can help with expenses such as cleanup, third-party bodily injury and property damage, and more, companies would generally need a separate Transportation Pollution Liability Insurance policy to cover spill-related environmental damage costs, Mills said. Physical damage to the truck is typically covered by the trucking company’s Auto Physical Damage Insurance, while loss of cargo can be covered by Motor Truck Cargo Insurance. Excess Liability Insurance is often recommended, as well.
With dairy being the main ingredient in Alfredo sauce, it can be a pretty intensive environmental cleanup operation depending on where the spillage occurred.
“The environmental cleanup costs for dairy, crude oil, gasoline, and in very intense cases, chemicals such as ammonia, could easily reach limits of up to $1 million, depending on where the accident happened, what the infrastructure looks like, and whether there is water drainage and seepage into the residential water supply,” Mills explained.
Nuclear verdicts continue to threaten transportation industry
Research from the American Transportation Research Institute released in 2020 found that large verdicts against trucking fleets were significantly increasing in number and size, including a 51.7% increase in the size of verdict awards between 2010 to 2018. During this time period, the average verdict size for a trucking crash lawsuit above $1 million increased almost 1,000%, CNBC reported. In 2021, a $1 billion verdict against a trucking company over a fatal 2017 crash was considered a possible new record for the largest nuclear verdict in the industry, FreightWaves reported.
The frequency of nuclear verdicts is certainly up. Losses exceeding the primary limits of $1 million are much more frequent now than they were even five years ago.
The definition of a “nuclear verdict” has changed over the years, Mills said, but is commonly considered to be one reaching in excess of $10 million or more. “The frequency of nuclear verdicts is certainly up,” he said. In addition, “losses exceeding the primary limits of $1 million are much more frequent now than they were even five years ago.”
Large losses can have far-reaching impacts across multiple areas of a trucking operation. In cases where negligence is involved, companies may face significant Liability claims and the potential for Nuclear Verdicts. The growing frequency and severity of Nuclear Verdicts are also making it more challenging to secure higher Liability limits, which can result in trucking companies operating with lower Third Party Liability limits than desired as carriers become more cautious about offering increased capacity.
As insurance premiums increase in response, smaller trucking operations may be pushed out of the industry, Mills said. “Premiums are getting to a point where it is difficult to afford to operate as a non-fleet operator,” he said.
Focus on safety, training amid driver shortage
In 2021, the American Trucking Association estimated that the shortage of truck drivers reached an all-time high of 80,000 and could exceed 160,000 drivers by the year 2030. Contributing factors may include pay, e-commerce competition, retirements, and recruitment issues, CNBC reported in July. In Texas, some fleets have sought out foreign drivers to help fill positions, FreightWaves reported this month.
“We are seeing more companies in border states utilizing international drivers due to the driver shortage, or recruiting drivers from other states,” Mills said. “Some of the possible issues are when you have drivers who do not necessarily have the experience needed, or who do not have experience hauling specific loads, such as loads that have the potential to shift,” he said, pointing to the recent tomato spill.
Driver shortages are leading some companies to take on additional risk in their hiring and employment practices, which can contribute to preventable accidents. Less experienced drivers are more likely to be involved in incidents, and shortcuts in the hiring process to quickly fill positions can increase exposure for all parties.
Expanding the pool of qualified drivers, including recognizing truck drivers within broader skilled worker categories, could help alleviate hiring challenges. Additionally, implementing incentives to attract and retain new drivers may support more sustainable workforce development within the industry.
Despite the staffing difficulties, trucking companies must continue to prioritize safety. Insurance carriers are increasingly requiring companies to utilize telematics and cameras, Mills said. This added technology can also assist in driver training efforts. “The telematics gives you an opportunity to counsel the driver. If they get caught for hard braking, speeding, or insufficient attention or looking down, they can use these samples as a training tool to counsel drivers,” he said. “These negative driver tendencies, if shown to be frequent within the data and without documented training, can potentially be used in litigation involving a claim.”
Incentivizing drivers to maintain a quality driving record, implementing pre-operational inspections, and having policies about cellphone use are among other recommended practices. “If your drivers are doing well, your premiums are most likely staying flat,” Mills added.
