Insurance Companies Likely to Take Hard Stance on Non-Domiciled CDLs

Insurance and Enforcement Consequences

The trucking sector may soon experience significant changes to its insurance policies, particularly regarding non-domiciled commercial driver’s licenses (CDLs). As the enforcement of updated rules concerning non-domiciled CDLs is set to unfold, insurance firms are expected to adapt their strategies to mitigate potential liability risks.

An anonymous insurance executive from one of the leading brokers in the nation indicated that it is probable that insurance providers will institute policy revisions that expressly restrict the employment of drivers holding non-domiciled CDLs within the next twelve months. The concern arises from the risk of “nuclear verdicts” in collision cases involving holders of non-domiciled CDLs, as juries may lack sympathy for companies employing drivers whose licenses could be deemed invalid under the emerging regulations—particularly in light of strong statements from DOT Secretary Duffy against states issuing non-domiciled CDLs.

He cautioned carriers and brokers who overlook the issue with non-domiciled CDLs, asserting: “It’s the end of the road.”

Liability Risks for Brokers

The ramifications extend beyond the carriers alone. The same insurance executive highlighted that freight brokerages working with motor carriers known to engage non-domiciled CDL drivers might also incur legal liabilities. Attorneys for plaintiffs may pursue claims against both brokers and carriers in cases involving accidents with such drivers.

Numerous carriers have reported heightened scrutiny from their insurance providers.

One fleet leader noted that the conditions for his insurance renewal were considerably stricter than in past periods, which required:

• Photographs of driver’s licenses

• Confirmation that driver domiciles correspond with their CDLs and business entities

• Impeccable Motor Vehicle Records (MVRs)

• Accurate address details on payment documents

• Signed declarations confirming that certain previously leased drivers would not remain with the company

Damian Gunjak, an executive in the trucking fleet sector, corroborated this pattern: “Our captive provider already informed us of this earlier this year. It’s not an issue for us since we don’t employ unqualified, inexperienced drivers.”