What the FAIR Trucking Act Could Mean for Businesses That Rely on Trucking

Trucking plays an essential role in keeping businesses supplied and goods moving across the country. But for many trucking companies and the businesses that depend on them, the rising cost of insurance has become a serious concern. One of the drivers of these costs is the trend of “nuclear verdicts” in accident litigation, which refers to jury awards that go far beyond the actual damages.

A new bill in Congress, the Forum Accountability and Integrity in Roadway (FAIR) Trucking Act, aims to address this issue. You can read the bill here.

What the Bill Would Do

The FAIR Trucking Act is designed to limit “forum shopping,” a legal tactic where attorneys move cases into state courts that are historically more favorable to large awards. Instead, the bill would give federal courts jurisdiction over certain trucking-related cases when:

• The matter involves interstate commerce
• The amount in dispute exceeds $5 million
• At least one plaintiff and one defendant are from different states

By moving these cases into federal courts, the bill seeks to create a more balanced and consistent environment for litigation.

Why This Matters to Businesses

Even if your company doesn’t own trucks, this bill could have an impact on your bottom line. Here’s why:

• Insurance costs: When trucking companies face large jury awards, insurers raise rates across the board. This affects freight carriers of all sizes.
• Supply chain stability: Small and mid-sized trucking companies often operate on thin margins. One unfavorable verdict can put them out of business, which reduces capacity in the supply chain.
• Consumer prices: Higher transportation costs ultimately show up in the cost of goods.

What You Can Do

While legislation moves forward, businesses can take steps now to better manage transportation risk:

• Review your own contracts with carriers to understand liability exposure
• Work with your broker to explore coverage options that protect your supply chain
• Stay informed on legal and regulatory developments that may affect the cost and availability of trucking services

If the FAIR Trucking Act passes, it could provide a measure of relief for trucking companies and the businesses that depend on them. By reducing the incentive for forum shopping, the hope is to bring more fairness and predictability to trucking litigation.

We’ll continue to monitor the bill’s progress and share updates on what it could mean for our clients.

 

*Disclaimer
The information contained herein is offered as insurance industry guidance and provided as an overview of current market risks and available coverages and is intended for discussion purposes only. This publication is not intended to offer financial, tax, legal or client-specific insurance or risk management advice. General insurance descriptions contained herein do not include complete insurance policy definitions, terms, and/or conditions, and should not be relied on for coverage interpretation. Actual insurance policies must always be consulted for full coverage details and analysis.