Before hitching that reefer trailer, make sure to choose the right coverage to avoid insurance meltdowns

The COVID-19 pandemic has affected all sectors of trucking, but some more than others. Facing almost complete industry shutdowns, drivers in oil, gas and automobile manufacturing have explored other more profitable truckload sectors.

One such sector that has seen relative stability throughout the pandemic is refrigerated (reefer) trucking. The steady capacity of grocery products deemed essential, medical supplies, and even the coming produce season has sustained reefer trucking’s profitability.

While many consider switching to refrigerated trucking this summer, there are some things to consider before hitching your first reefer trailer. Unlike flatbed, dry van and other trailer types, the contents of a reefer trailer require special handling.

Reefer trailers are used to haul temperature-sensitive cargo such as meat, dairy, produce, plants, and even pharmaceuticals. Because the nature of the cargo is time- and temperature-sensitive, a driver pulling a reefer faces unique challenges requiring insurance coverage that specifically addresses these issues.

“Truckers need to understand what type of coverage your broker is providing you,” said Brandon Richards, Reliance Partners’ Chief Sales Officer. “It’s about understanding what coverage you have and asking for additional coverage to protect yourself.”

Richards warns drivers not to assume reefer breakdown coverage is the same thing as spoilage coverage. Reefer breakdown insurance simply protects drivers and motor carriers against cargo spoilage due to a mechanical breakdown of the reefer unit. On the other hand, spoilage coverage protects against the loss of cargo regardless of what caused the load to spoil.

“The endorsements on a reefer policy are different than on a dry van or flatbed policy,” Richards said. “You have to make sure that your policy has the right endorsements and will cover what you’re hauling.”

Time delays, mechanical failure, temperature fluctuations and driver error are the biggest threats to the contents of a reefer trailer. In order to find success in reefer hauling, drivers must understand how to properly haul each load without fail.     

Before truckers haul their first reefer load, Richards advises all truckers to familiarize themselves with the proper food safety procedures, know how to track and control the trailer’s temperature and be able to routinely sanitize the trailer and its corresponding equipment. He also instructs drivers to learn the necessary pre- and post-trip procedures to ensure the trailer maintains a high standard of cleanliness.

“Refrigerated units are designed to keep cargo at a specified temperature throughout the length of the haul; they’re not necessarily designed to cool down the cargo,” Richards said. “You can’t put cargo in there at a certain temperature and expect it to cool down. You have to follow the proper guidelines for pre-cooling the trailer.”

Reefer drivers should also be sure to have their trailer inspected once a month and to keep a record of each report for at least 12 months. According to Richards, insurance companies will ask for this documentation in the event of a claim because they’ll want to make sure that the unit was properly maintained and not neglected.

Richards also recommends new reefer drivers to be well-versed on the latest regulations regarding food transport, especially the Food Safety Modernization Act (FSMA), which requires all trucking companies hauling food to follow top-notch sanitation guidelines including providing basic sanitary training to their workforce.

The FSMA was passed in 2011 to address an outbreak of salmonella and listeria that was transmitted through unsanitized freight transportation practices. The Act gives the Food and Drug Administration (FDA) authority to enforce regulations that help prevent foodborne illnesses caused by potentially adulterated freight.

Zach Bowling, AmWINS Group Senior Vice President and an experienced broker for physical damage and cargo, explained the importance of trailer maintenance and how easy it is for one malfunction or mishap to adulterate an entire truckload.

“We’ve had reefer loads traveling over long distances experience temperature fluctuations throughout the trip,” Bowling said. “Because the temperature would go out of the acceptable range, the load would have to be rejected.”

It is important to understand that insurance carriers may exclude certain temperature-sensitive food products from your reefer cargo policy. Bowling added that because meat and seafood, in particular, are difficult commodities to haul, insurance underwriters want to know what you plan on hauling so they can appropriately price your policy or calculate potential losses.

Policies may also exclude driver negligence and delay, according to Reliance Partners.

Bowling argues that many buy reefer trailers before they even consider talking with an insurance professional, which he describes as putting the cart before the horse.

“It’s hardly an issue to add reefer insurance,” Bowling said. “It’s mainly about what their expectations are for how they’re going to cover it and whether or not reefer is going to be a long-term viable option for them.” 

He continued, “I’ve had a few insureds reach out to me over the past couple of weeks tell me that they’ve added a couple of reefer trailers to their fleet and wanted to know if they could add reefer coverage. Most of the time, I tell them yes, but it’s a ‘yes, but … .’”