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Expand available insurance coverage by creatively thinking outside the box

pinball different pathWhat do you do when insurance coverage is grossly inadequate for a catastrophic truck crash personal injury or wrongful death case?

Big truck wrecks can cause a lot of carnage. When a small passenger car is run over at highway speed by a 80,000 pound tractor trailer bigger than a Sherman tank, a tremendous amount of kinetic energy is unleashed. The results are often than catastrophic.

Unfortunately, the liability insurance required for big trucks has not been adjusted since President Reagan’s administration. Minimum insurance for general freight tractor trailers in interstate commerce was set at $750,000 in 1981. Minimum coverage for interstate hazmat trucks and passenger buses was set at $5,000,000 in 1985.

There has been a lot of inflation in the past 30 years. If the $750,000 minimum insurance limit were adjusted for inflation from 1981 according to the Consumer Price Index, it would be about $2 million. If adjusted at the medical inflation rate, which a lot of folks say is more relevant for personal injury claims, it would be $4,422,000. But a dysfunctional Congress that can’t seem to accomplish anything on this except responding to lobbyists by blocking action in an Appropriations subcommittee markup of the transportation funding bill.

The situation is even worse for trucks operating only inside Georgia, where the minimum required coverage for big commercial trucks is only $100,000. That has remained unchanged for decades.

Confronted with inadequate insurance for catastrophic claims, we have to think outside the box. What other sources of insurance coverage are legitimately accessible?
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  •  From $400,000 to ~ $3 million.  A tractor trailer driver distracted by an international cell phone call ran over a line of traffic stopped due to another accident up the road, killing three people and injuring several others. The trucking company’s insurer insisted there was only a single $1,000,000 policy. The insurer’s representatives insisted that all the victims’ families should just figure out how to split that.  Our client’s share would have been around $400,000. The family had a relative who was a corporate counsel for a major corporation in New York find a lawyer in Georgia, and ultimately chose me. Everyone else agreed to divy up  that $1 million policy. We declined and pursued a combination of intermodal freight and maritime law theories. That led to uncovering a lot more insurance. A year later we settled a hair under $3 million, more than the record verdict in the small county in south Georgia. Ironically, that was paid mostly by an insurance company that had before suit denied in writing that it had ever heard of the company it insured.
  • From about $200,000 to several million. Another tractor trailer ran over a line of traffic stopped in a construction zone, killing 5 people and injuring others. Again, the trucking company’s insurer insisted there was only a single $1 million policy. The trucking company itself had no unencumbered assets, just a bunch of leased equipment. We should just divide that between the give wrongful death  claims and go away. Lawyers for several of the families brought me in to lead the hunt for more coverage. Knowing where to look, I found another $50 million of insurance coverage. That case is still pending.
  • From $250,000 to $2 million. In another case, involving a defective piece of warehouse equipment rather than a tractor trailer,  the insurer for the Florida welding shop that made a knockoff work stage on special order, represented that there was only $250,000 insurance for a wrongful death claim. We kept digging and found that company had a cumulative total of $1 million coverage under insurance policies they did not realize overlapped. After collecting that million in Florida, we then came back to Georgia, classified a forklift as an office supply to due the distributor for violation if the Georgia Fair Business Practices Act, and collected their $1 million policy limit. In the end we collected $2 million after the first insurance company insisted there was only $250,000 coverage.box
  • From $25,000 to $400,000.  In one recent case, a log truck was making a u-turn in the dark on a rural highway without proper lights and reflectors. Witnesses said it was not visible until they were “slap up on it.” A man driving to work in predawn darkness was killed. The 18 wheeler log truck incredibly had only $25,000 insurance coverage.  After litigating over insurance coverage and bankruptcy issues as well as the original wrongful death claim, we collected about 16 times that much from the insurer for the logger who loaded the truck and the insurance agent that improperly handled the logger’s phone call reporting  the claim. It was less than the theoretical value of the claim but it was enough for the decedent’s daughters to get a good launch in adult life.

All this requires a bit of creativity, approaching problems with old knowledge, curiosity and a fresh eye. Creativity can be productive if it is accompanied by hard work and perseverance.  Creativity is not the same thing as IQ. The world is full of people with high IQ scores who are not creative and those with average IQ who are. Combine IQ, creativity and grit, and you really have something. I don’t claim any particular genius, but sometimes curiosity leads to creative approaches to solving legal problems.

The approaches to finding significant additional insurance coverage are not voodoo or alchemy.  But they do involve a critical knowledge of subtle complexity gathered over 38 years in law practice.  I will not publish the methods for free on the internet. But I am happy to assist clients and lawyers who hire me for that purpose.

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Ken Shigley is an Atlanta trial attorney focused on serious personal injury and wrongful death cases. He is currently chair of the American Association for Justice Motor Vehicle Collision, Highway & Premises Liability Section. Previously he served as president of the State Bar of Georgia and chair of the board of trustees of theInstitute for Continuing Legal Education in Georgia. He is lead author of Georgia Law of Torts: Trial Preparation and Practice and a board certified civil trial attorney of the National Board of Trial Advocacy.