Specialized Carriers: An Underwriting Overview

Prepared by the
IMUA Transportation Committee

IMUA thanks the
Specialized Carriers and Rigging Association
for its technical assistance in preparing this paper.

Copyright 2003 Inland Marine Underwriters Association


The Inland Marine Underwriters Association [IMUA] is a not-for-profit national trade association comprised of:
  • Members - insurance and reinsurance companies that underwrite a significant portion of the commercial inland marine insurance in the U.S.
  • Associate Members - companies that provide products and/or services to the insurance industry.
One of the services IMUA offers its members is the publishing of information for use by underwriters, loss control and claims specialists, and other interested parties. The topics covered in IMUA Reports and Bulletins are intended to provide an overall awareness of the exposures and hazards associated with a specific industry or class of business.

Volunteer members of a committee of the Inland Marine Underwriters Association have produced this report. Committee members abide by antitrust restrictions while compiling information. It is generally not possible to treat any one subject in an exhaustive manner, nor is it IMUA's intent to do so. No warranties are made regarding the thoroughness or accuracy of the report or any part of it. Nothing in this report should be interpreted as providing definitive guidance on any question relating to policy interpretation, underwriting practices, or any other issues in insurance coverage.

IMUA does not prescribe to its members how to make underwriting or claims decisions, nor does it require that analysis follow any particular format.

Introduction & Industry Background

Motor truck carriers and riggers who haul oversized or overweight cargo are typically called specialized carriers. Today there are in excess of 1200 carriers that could be considered to be specialized carriers. Many of these carriers are members of the Specialized Carriers and Rigging Association [SC&RA] formed in 1959 - www.scranet.org.

For the specialized carrier and its insurance underwriter, these exposures present a series of unique challenges. If the carrier is going to achieve its goal - the safe delivery of the cargo - considerable coordination is required with a number of entities. Irrespective of the level of detail and planning, things do go wrong, and considerable liability exposures exist if there is a failure in the transportation process. These challenges extend beyond the usual physical damage to the commodity carried or personal injury liability and workers' compensation coverage. Additional considerations involve cargo liability protection for the benefit of the carrier, and direct cargo insurance for the benefit of the owner. Rigger's liability at both the point of loading and at the delivery point can be additional exposures. In addition to the unique aspects of each transport situation, these cargoes almost always involve extremely high values, both in terms of direct cost of the equipment and the consequential losses resulting from the long lead times required to replace a damaged shipment or parts. Business interruption expenses could be significant, for example, for a custom-made generator which was manufactured overseas.

It is these types of risks that are the primary concern of the inland marine underwriter. For all these reasons, it is essential that the underwriter have some familiarity with the specialized carrier and rigging industry.

Typical Types of Moves Encountered

The cargo carried by such operations may be -

  • buildings (either modular sections or entire houses);
  • over-sized, specially-made industrial equipment (such as boilers, turbines, generators);
  • construction components (such as bridge or tunnel segments) that must be delivered to and installed at some distance from the point of manufacture or assembly. Frequently the transporting equipment itself must be designed, fabricated or otherwise adapted to the specific requirements of the move.
Many of these loads have an intermodal component to the transit, that is often the contractual responsibility of the carrier, and that an underwriter should be aware of prior to quoting. In many instances a portion of the trip will be done by rail, on specialized heavy-haul rail cars [such as a Schnabel car], or by barge. The barge segment is especially prevalent on the shipment of power generating or refinery equipment, as many of the production facilities are located adjacent to or near bodies of water.

Principal Causes of Loss

The most common causes of loss associated with specialized carriers are outlined below.

  • Collision, Upset, Overturn, Shifting of Load
    Any over-the-road transportation always involves the risk of collision with another vehicle or object. Collisions as well as the perils of upset and overturn make it critical for specialized carriers to carefully route and time operations. Because of the often oversized nature of these cargoes, issues of weight and center of gravity often are difficult to resolve. The object being transported may shift, detaching itself from the transporting vehicle or cause the vehicle to overturn. Also, serious damage is sometimes caused from insufficient overhead clearance along the intended route. This exposure underscores the need for careful planning in the stowing and securing of loads.

    A lead escort vehicle, which precedes the cargo carrying unit, is generally equipped with a height/clearance pole equal to the highest part of the load. This pole has sensors attached and if it strikes any overhead object, it sets off a signal in the escort vehicle. Inter-vehicle communication alerts the carrying vehicle that the load will not clear the upcoming overpass. For this reason, the escort vehicle must be far enough in front of the cargo vehicle so that its warning will give ample time to the carrier to brake and come to a complete stop before reaching the obstruction.

    There should also be a trail escort vehicle with warning signals and flashing lights to warn oncoming traffic of the slow moving vehicle. This precaution allows the traffic to reduce speed or change lanes, thus avoiding rear-end collisions of sudden braking that might cause a multiple vehicle accident.

  • Loading and Unloading
    Due to the weight and dimensions of the load, quite often specialized equipment must be used for the loading and unloading of the cargo. Examples of such equipment would be mobile truck or crawler cranes, four-point hydraulic lift systems, or mobile gantry cranes. Invariably, the process of loading these cargoes on a transporting vehicle and unloading/delivering them at the destination involves rigging and equipping for extremely heavy lifts. The potential for serious damage is high at this stage - knowledgeable, detailed planning will help minimize such losses.

  • Improper Packing
    Especially when long distances and transport times are involved, shippers and carriers must take into account the range of climatic conditions to which the cargo will be exposed. It is essential that appropriate packaging and protection be used to prevent damage from the elements. Also, packaging to protect the item, especially critical components, or related parts accompanying the shipment should be considered.

  • Vandalism and Malicious Mischief
    These exposures may be a problem in two particular instances:
    • in the case of a long trip, the rig may have to sit overnight in unprotected areas; and
    • where the nature of the cargo (such as a municipal incinerator or a nuclear reactor component) may make the shipment a political target.
Underwriting Concerns

  • Transporting Equipment
    Specialized carriers and rigging companies are innovators and problem solvers. They often must develop new methods, devices and equipment that are custom-designed to individual transportation projects. Although certain types of moves can be done with a single tractor-trailer combination, other assignments may require either that existing equipment be modified to the particular needs of a job, or that custom transporting equipment be fabricated for one-time use. For example, large, "super" trailers can have 100 or more tires; such trailers often utilize aircraft landing gears and tires due to the high tire load capacity. Other types of specialized equipment manufactured by companies such as Goldhofer, Commetto, and Koegel-Kagan.used could include -
    • Prime movers
    • Modular platform trailers
    • Hydraulic trailers
    • Self-propelled hydraulic platform units

    Trailer manufacturers typically use 100,000 PSI minimum yield steel in the construction of trailers rated up to 2,000 ton-carrying capacity. These are multi-axle, low-bed units that may include special suspension and steering. In designing these units, the gross axle rating must be carefully considered for both static and dynamic loads. Damage due to overloading the tires, rims, bearings, axles, suspension or brakes may place the project at risk. These "super" trailers also may be provided with hydraulic leveling devices or an axle-suspension system which oscillates around a central pivot point to keep the load level and tire pressures even when traveling over rough terrain. Some manufacturers even create self-propelled transporters that are equipped with steel tread crawlers, similar to a military tank.

    While shipments in enclosed trailers are possible, heavy or bulky loads are most often transported in open-top or flat-bed trailers. Flat racks may be used for mill products and machinery, occasionally with removable sides.

    In designing transporting equipment the center of gravity of the cargo must be taken into account. Sometimes the vertical and transverse centers of gravity are unknown and must be estimated. Also, the actual weight of the cargo often can only be approximated, which adds to the importance of proper engineering in the design of the vehicle and the transport and lifting of the cargo.

  • Packaging
    The nature of the cargo, length of the trip, and the exposures faced during transport all dictate the type of packaging that will be sufficient to protect the property against the elements. Sometimes a simple canvas tarpaulin will suffice. Other situations may require shrink wrapping in plastic, the introduction of desiccants or other moisture absorbing agents or other ventilation, heating or cooling provisions, or the application of preservatives for corrosion protection of exposed bearings and parts.

  • Stowing and Securing
    The stowing and securing of heavy cargo must consider not only the equipment's center of gravity, but the weight as well as the static and dynamic loads upon the equipment, and the bracing material. The blocking and securing should be sufficient to prevent the cargo from shifting in any direction, and also take into account the fact that the position of the cargo during transport may be completely different from its positioning when installed for service. For example, a refining vessel that is designed to be installed in a vertical position may have to be transported in a horizontal position, thus requiring some special bracing and supports.

  • Routing Considerations
    Beginning with the size and weight of the cargo, many factors will affect the logistics of the movement. As a general rule, the longer the distance, the more complex and challenging the route. Seldom does a specialized cargo movement simply move "down the road." Bridge crossings of lakes and rivers; traversing deserts, mountains and valleys; and permission to drive through villages, towns and densely populated urban communities impact routing considerations and the timely delivery process. Another critical element is the season of the year and the accompanying weather conditions on local roads. A move originating in southern California in February in transit to Minneapolis presents its own unique challenges.

    Overland shipments require meticulous planning. Not only must road beds be adequate to support the anticipated load, but overpass weight limits must be taken into account and underpass clearances anticipated. Vertical clearances are not limited to underpasses; trees and power and telephone lines are frequent obstacles. It is always prudent to scout the route ahead of time and for the driver and all authorities concerned to know the exact vertical clearance of the rig from the ground to the highest point. The carrier also should be aware of the gross weight of the loaded rig and its impact on individual state regulations.

  • Permits, Authorization, Local Coordination
    Often these carriers are subject to state and/or federal regulations. All carriers must obtain proper permits from the state or states they will traverse for weight, height, width and/or length. The configuration of the trailer or conveyance is dictated by state weight per axle regulations. Most states have adopted a maximum 20,000 lbs. per axle standard. As such, the total combined weight of the load and conveyance would be used to determine how many axles are needed for the allowable weight distribution.

    As a matter of legal requirement and good practice, oversized loads should display appropriate warnings and markings. Local requirements may vary in dictating whether transport must occur during daylight hours or at night, or on weekends or holidays. For example, "super" loads may be required to travel at night or during early morning hours to avoid traffic delays.

  • Carrier/Driver Experience, Supervision and Control
    As was mentioned earlier, the hallmark of specialized carriers is flexibility and innovation. The experience of the carrier and driver is a critical factor, as experience can vary from the professional specialized carrier to the local house mover who was the low bidder but has never moved industrial equipment. Typically, roles are not rigidly defined, as in one person does the driving, another is responsible for rigging, and another handles the bracing.

    Such transportation is usually the successful product of teamwork and application of multiple skills.

    Specialized carriers generally tend to make repeat trips of the same type of cargo (i.e., boilers, bridge spans, etc.), which can be reassuring to the underwriter. As such, the specialized carrier's record of successful moves may be the best guide to future performance. However, underwriters should not be lulled into a false sense of security by a loss-free history in terms of cargo shipments. An examination should be made of the carrier's federal DOT safety performance rating or the carrier's workers' compensation experience, both of which also may provide indicators of future performance.

    A loss control engineering inspection of the carrier's facility will help determine management's level of commitment to loss prevention and operation planning such as the condition of the equipment.

Insurance Coverage Provisions and Concerns

This class of carrier is very much 'contract driven.' These loads can be hauled under either a Bill of Lading or a specialized Rigging Contract drawn up specifically for each move. These contracts will generally spell out the scope of the job and the responsibilities of the carrier such as loading, unloading or the use of third parties.

The specifics of the contract will help the underwriter determine which form(s) to use in tailoring coverage. As a general rule, the following forms could be used -

  • Transit
  • Rigger's liability
  • Installation
either as a single form or in combination.

When to ask for a copy of the contract, or when to rely on the carrier's experience in handling 'normal' operations becomes a judgment call. For large dollar value, complicated or unusual moves [see ADDENDUM for illustrative examples of moves that could be encountered], the informed underwriter should obtain a copy of the contract for review so that proper coverage can be tailored, and that no surprises arise in the event of a claim for loss or damage. The contract review can also alert the underwriter to possible transfers of liability.

Of particular note, the underwriter should be aware of the legal liability and its impact on potential subrogation. As a pseudo-tariff, the carrier's legal liability could be stated at $2.50 per pound, or $5000 per ton or a stated amount.

Generally a non-filed class of inland marine [some states do require filing of related exposures], specialized carriers coverage is subject to agreement between the insured and the underwriter, and is often underwritten on a manuscript form. Broad, "all-risks" type coverage is frequently written; however, it is possible to limit coverage to specified perils such as collision, upset, overturn, vandalism, etc. It is critical that the policy states clearly when coverage begins and ends. This may not necessarily be a day and an hour, but from a certain point when loading commences to a point when unloading is complete, or perhaps when installation is complete. It is important that there be no misunderstanding about when coverage applies.

Some potential risk transfers would be if the loading/unloading is sub-contracted to a third party, or if a connecting carrier [barge or railroad] may be given custody of the property for some portion of the shipment.

Such policies generally incorporate a substantial deductible. Deductibles are a matter of negotiation between the insured, producer and the underwriter, and generally reflect a reasonable participation in the loss by the insured carrier or shipper. Since this class is characterized by a potential large loss event, the opportunity for small claims is quite remote, and deductibles based on "expected losses" seldom need to be taken into account.

Exclusions and conditions may have to be tailored to the individual risk. Where substantial rigging is going to occur, including heavy lifting, it might be appropriate to include a condition that the weight of the load will not exceed the rate and lift of capacity of the crane and its rigging.

Carriers that are members of the Specialized Carriers and Rigging Association may require that the insurer guarantee their compliance with the rules of that organization. Such a policy also might exclude any repairing, adjusting, servicing or maintenance operations unless fire or explosion ensues, and then only for a loss by such fire or explosion. This condition may be further developed to exclude unauthorized modifications to equipment.

Lessons Learned from Losses

  • At a port, a trucker picked up an oversized heat exchanger that had been rigged onto a flatbed trailer (tandem tri-axle). The trucker proceeded with the loaded trailer onto a four-lane highway. Upon exiting the highway near the destination, the load shifted, causing the cab and trailer to overturn. The interior of the heat exchanger was glass lined, and the lining cracked and shattered. The heat exchanger had to be returned overseas to the manufacturer for repairs. This loss underscores the importance of adequate and well-planned bracing and securing, which helps prevent load shifting and minimizes the risk of overturn. It also illustrates the consequential loss complexity where unique properties and foreign manufacturers are involved.

  • A trucker was hauling various boats from the manufacturer to the dealer along a highway. One yacht was a large sports fisherman with a flying bridge. While passing under an overpass, the entire flying bridge and the cabin overhead were sheared off due to insufficient vertical clearance. In this case, insufficient planning and failure to anticipate overhead clearance or devise alternate routes was an invitation to loss.

  • A refining plant was shipped from Puerto Rico to Jacksonville, Florida, where it was to be off-loaded onto a trailer for delivery to Tennessee. A heavy cracking tower was lowered onto a trailer, along side the dock, whereupon the trailer buckled and collapsed. Investigation revealed that although the trailer had sufficient rated capacity, it had been structurally "modified" by the carrier. A second trailer had to be delivered and a large crawler crane had to be rented to reload the cracking tower. The lesson is that the structural integrity of a transporting trailer can be impaired by unauthorized "handyman" modifications. Such alterations should only be made by the manufacturer.

  • In southern Louisiana, a commercial diving decompression chamber was being transported by truck along a highway from the job site. The pin attaching the trailer to the cab failed while the truck negotiated a curve, resulting in the trailer overturning and rolling several times. The damage to the pressure vessel shell of the chamber was so severe that it was rendered a constructive total loss at $2 million. The failure to have an adequately sized pin, properly fastened (or even multiple connecting devices) contributed to this severe loss.

Further reference and educational materials on this subject are available from:

    Specialized Carriers and Rigging Association
    2750 Prosperity Ave.
    Suite 620
    Fairfax, VA 22031-4312
    P (703) 698-0291
    F (703) 698-0297

This Association represents companies involved in crane equipment and rental, machinery moving, mill righting, rigging and heavy transportation.


Example 1

Emmert International of Clackamas, Oregon established a world record for the heaviest building ever moved on wheels during the relocation of the 1,650 ton Fairmount Hotel. The move covered 10 city blocks, a bridge over the San Antonio River, and negotiated 90 and 110 degree turns in the heart of the commercial district of San Antonio, Texas. In recognition of this move, Emmert received the Motorola "Build America" award from the Associated General Contractors, and was also presented the Hauling Job of the Year award from the Specialized Carriers and Rigging Association.

Example 2

White Brothers Trucking move a yacht.

Example 3

White Brothers Trucking move a boiler with a 4 axle tractor and a 5 axle single drop trailer.

Example 4

Barnhart Crane & Rigging move of heavy equipment across culvert.

Example 5

Bigge Crane & Rigging move of a 510T stator for Florida Power & Light to a heavy duty truck.

Example 6

Midwest Specialized Transportation of Rochester, MN move of heavy machinery.

Close Window