In the commercial vehicle transportation arena, it is not uncommon for owner/operators to lease their 18-wheelers to motor carriers. Federal law requires the motor carrier to provide the insurance coverage, but the federal statute did not specify who must pay for it.
Motor carriers were charging back to its owner/operators the cost of public liability and property damage insurance that it was required to maintain under the federal statute. A group of owner/operators who leased their equipment and driving services to a motor carrier that transported property and interstate commence sued the carrier, alleging it violated the Federal Truth-In-Leasing Regulations by having charged back its insurance cost to them.
A Federal District Court has ruled in favor of the motor carrier permitting it to pass on the insurance cost to its owner/operators. An appellate panel has affirmed the lower court’s decision holding that the motor carrier’s charge back of the insurance cost to the 18-wheeler owner/operators was allowable under law.
Richard J. Arsenault, 2011
