Marsh launches auto liability insurance facility for US freight brokers

By Ashish Tiwari

Aug 13 - (The Insurer) - Insurance broker Marsh on Wednesday launched BrokerSafe, an insurance facility aimed at providing U.S. freight brokers more stable and affordable auto liability coverage.

Freight brokers, who connect cargo owners with trucking firms, face significant contingent auto liability risks if a safety incident occurs. Rising freight broker auto liability rates, a shrinking insurance market and large jury verdicts have made coverage harder to obtain in recent years.

Developed with Marsh McLennan’s consulting arm, Oliver Wyman, BrokerSafe utilizes a proprietary underwriting technology tool that analyzes a broker’s full risk exposure.

This is backed by a panel of A-rated U.S. insurers, with up to $5 million in primary limits and an additional $5 million in excess capacity from the London market.

Marsh said the facility's advanced analytics allow insurance firms to build coverage closely to a broker’s true risk profile, moving away from traditional measures such as revenue or broker-carrier agreements.

“With BrokerSafe, Marsh and Oliver Wyman are transforming the freight broker auto liability insurance market,” said Janelle Griffith, Marsh’s U.S. and Canada logistics practice leader.

The launch comes as logistics firms and their insurers grapple with higher claims costs in the wake of nuclear verdicts.

In July this year, reinsurer TransRe had flagged that a rise in such verdicts has led to a deterioration in the U.S. casualty insurers' results.

Nuclear verdicts, large jury awards that often impact small businesses and consumers, have become increasingly common, drawing in offshore litigation funding, the reinsurer had said.

Marsh McLennan CEO John Doyle had pointed towards the challenging U.S. litigation environment at the company's second-quarter earnings call in July.

“Our clients are feeling the effects of this growing problem. Consider the rise of so-called nuclear verdicts – cases exceeding $100 million have grown 400% over the past decade according to the U.S. Chamber of Commerce,” he said.