Beyond the Claim
Beyond the Claim

Episode 13 · 1 month ago

Why Trucking Claims Are Seeing Record Payouts w/ Tom McLaughlin


Once, it was medicine that saw high volumes of claims, being seen as deep pockets.

Now, it’s trucking.

But like any other claim, with the proper preparation and mitigation, you can avoid the high payouts.

So says today’s guest, Tom McLaughlin, Senior Dirertor of Risk Management and Claims at TFI International, who joins the show to cover the fast-paced world of trucking claims.

Join us as we discuss:

  • Why payouts are reaching record highs in the trucking industry
  • Why transparency is the key to handling overzealous plaintiffs
  • The future of trucking and risk in the industry 

Need more claims strategy in your life? Check us out on Apple Podcasts, Spotify, or on our website.

Listening on a desktop & can’t see the links? Just search for Beyond the Claim on your favorite podcast player.

If something's going to trial, we pretty much know what where it's going to add. If it goes in that direction, and I'll quote myself, I often say that which I don't know is what concerns me. And if I don't know what's going on and if if I don't have a grasp for something, that and that's what concerns me. You're listening to beyond the claim, the show for forward thinking risk and claims professionals curious about the latest industry trends, winning strategies and stories from influential leaders. Let's dive in. Hello everyone, welcome to this episode of beyond the claim. I'm your host, smart Cunningham, chief sales and marketing officer with broad spire. Today have a pleasure of joining me Tom McLaughlin, senior director of risk management with and claims, excuse me, with Tfi International. Tom, welcome, are great to be here. Thank you for joining us, Tom. I know that this is out. For those listening in it's December, two thousand and twenty one, so we are in some quarter of this pandemic. So I know that and with that have become new challenges and work environments and probably less bandwidth than ever before. So I appreciate you saying some time side to people this time. Great, thanks and Times. I'm not mistaken. You are in the Minnesota area. Correct, I am. I'm in beautiful EAGAN, Minnesota, which is a suburb of Minneapolis, and St Paul actillent. I'm in a South Florid myself. I remember the first time I tried to to Minneapolis and I think we were downtown Minnesota and the the crosswalks and minieaples are that way. Cross yeah, the Cross KS and there's a Floridia do. I'm thinking, what is this? And then I went back in the middle of January and I quickly realize what the Great Engineering Solution that I've been implemented. Fantastic. So yeah, I'm beautiful place. Beautiful. The good news is mark will have about six inches of snow tomorrow. So you're your flight get up here this weekend. I'll leave that's you to enjoy. I know there's only so much snow to go around. So all right, O town, welcome. So till I know that you have, and today I do, I mean you are very x you know a great expertise and passion on trucking and relates to the industry. See me the wrist management industry and I do want to dive in there deeply. But before we do that, for those folks in the audience that don't know you're tom you give us a little background on kind of your your career, your journey's brought you to where you are today? Sure, a little bit. First off, I work for Tfi International, which is the fifth largest transportation provider in North America, and TFI is an ever expanding growing operations. So it's it's a continued challenge for me. Tfi has over a hundred and twenty affiliated companies and so we're constantly having do it apt in look at new systems and new programs and so on and so forth. My beginning of my claims career essentially you could say I was born into it. My father was a the owner of an independent adjusting company in St Paul, wellknown, well respected man. Had A had his own TPA and learned a lot from my dad about the claims business and learned how to how to deal with clients and how to engage people and so on and so forth. So my dad exposed my brothers and eye to the industry at an early age. We went out to accident scenes early in our lives. We heard phone calls, we went to the office on Saturday morning and so on and so forth. And Otto High School I went to work for my dad and you know, started out, he called it, a gopher, as a person that would pick up medical records, get police reports, things that nature. Grew into becoming an ottawappraiser. Then I ended up dealing with liability claims and my dad sold his company in the early s to kind of a regional...

...adjusting company. I end up leaving there went to work for a midsize trucking company here in Egan called Dart transit had my eyes open to the beautiful world of defending truck drivers and trucking companies. At Dart learned what it was like to be in a a self ensured trucking environment. That moved on to a couple of different companies. Ended up here at Transport America in two thousand and ten. In two thousand and fourteen we were acquired by TFI international and been fortunate to expand my career with them the plain now where essentially I'm overseeing the claims in the US for them. It's like, you know, Tom some people say they were born into the industry and they just mean that. You know, maybe a parent was in it or maybe they started a younger age, but you were literally but you mentioned going out to, you know, accident scenes in some other examples. Yeah, I can see how that can seep into either I don't ever want to touch a clean of my life or I really like what I'm sitting here and it really intriguing. It sounds like it was more the ladder. Did you know right away that you wanted to stay in claims or is it just more intriguing? Yeah, very intriguing. Is An interesting part of the business. I realized I could make a living doing this and so on. The one thing I should add is my brother became a workers cop claim manager and I'm proud to save my oldest son, Dan works in well risk management for Wells Fargo Bank. So He's third generation and he enjoys the business as well. That's that's fantastic love here and that, you know, part of us. So our audience, you know, I would say, consists of folks that are, you know, lifers in the space and then some probably that are also interested in exploring a career in the space and I think hearing stories like that and understanding that this space can really take different paths. It doesn't have to be a direct, linear black path and the journey towards, you know, the swords of your later career is not singular necessarily. So love hearing that story. Yeah, I've really been fortunate and I've had great opportunities and I like to say I'm in the twilight of my career now as I head towards my retirement years. But Gosh, every day it's something I learned new and Tfis give me that opportunity to learn more and expand on what I do and it's just there's so many different aspects of the business and you know, it's a great world to be in. So so let's let's expand on that. So you know we'll dive into maybe trucking here, and I guess again we have because we have different spectrums, or both ends of its spectrum, with books listening in when we talk about trucking. Why distinguish trucking from other auto or other claim types in general? What's unique about trucking? Mainly because we're a depocketed target defendant and the olden days plantiff attorneys like to pursue medical malpractice because it was easy. Today it's trucking claims. Most trucking company aren't now most, but all trucking companies have to have at least of an hundred fifty thous coverage and most larger companies, ourselves included, have significantly higher limits than that. So you know the money is there to or highly regulated industry and you know we're regulated by the DOT or the Federal Motor carrier safety administration to have minimal hiring standards and we have hours of service. You know we have training standards and if a motor carrier doesn't meet those, a planeiff attorney will exploit those and they'll further their case and it becomes much more challenging, whereas you don't deal with that at a personal auto carrier. You don't have to deal with a negligent hiring,...

...retention and supervision. And so when you look at the span of your career, what what changes, or was singular change, however you want to respond? Have you seen what itemwood area you seem change the most over that span? Gere's the technology. Is that the approach to, you know, the the coverage, poach, the claims. What really stands out for you? I think the biggest change, well, we'll just speak since I've been here at Transport America. You know, claims weren't that expensive compared to today. Say, a fatality accident back in two thousand and ten perhaps you could settle it for a million to two million dollars. Today, five million, ten million, if not significantly more. So the cost of claims have gone up significant and lay jury verdicts have going up significantly. Plaintiff attorneys have become far more sophisticated and well connected in in pursuing trucking companies and as a result, you know, we're seeing much higher verdicts, much higher settlements. Consequently, insures, you know, don't want to take on that type of risks, so they'll charge higher premiums. The other aspect of it is motor carrier such as ourselves that carry high retensions really tend to folk focus on safety and the prevention of accidents in the first place, because if we don't have the accident in the first place, then you know there's not a cost involved and you know we don't have that potential large exposure. So this is so. It's not mean two thousand and ten is not that long ago. As you said that. I was hoping the said something more like one thousand nine hundred and eighty or I don't feel like I'm getting old here, but so. But even two thousand and ten, you're not saying it's inflation or any aspect of from an economics and point. Sounds like you're saying more it's the sophistication or the focus of the the attorney space. Or is it? What's that? But I'd say you know, juries are looking at it, not necessary, not always trucking companies, but they're looking at large corporate defendants as deep pockets and they're holding large corporations as being accountable. And you know trucking accidents are probably more prevalent than other corporate losses. So you know, it just becomes an easy target. Gotta, gotta. Okay, I have to ask you. You know our in December two thousand and twenty one year. We're all we're in the hopefully the fourth quarter of this pandemic. What's been most impactful to two truckers and I guess specific to the claim space, over the last eighteen plus Moss. Yeah, at the beginning of the pandemic it was a lot of uncertainty. We saw layoffs in the industry, we saw layoffs in our building and fortunately the trucking industry rebounded. For a while truck drivers were looked at as being heroes out on the forefront and, you know, as people that were willing to risk their health and their lives to deliver freight and you know, I think to this day they're still doing that out on the road. The the pandemic has change things, ranging from people coming into the office and working remotely to, you know, you our drivers and, you know, just advising them on, you know, proper care to make sure that they don't get infected, to, you know, dealing with the recent oceha direct to from the Biden administration saying that employers with more than a hundred employees have to have everyone vaccinated. So big changes there. But we, as a company, and I think collectively are my colleagues in the industry, have done a good job of of being resilient and adapting. Good case and...

...point. From working remotely, our company was heavily involved in Skype or Microsoft teams prior to the pandemics. So and people started working from home. We were all adept at doing that and it was so easy and it was fairly seamless. So we've been able to maintain. We'd been able to be strong. You know, we do miss that personal contact, but you know, we've been able to adapt and we were the truck drivers themselves deemed essential workers earlier on, or maybe so. Okay, so you didn't were any low or any reduction in the bocal claims that you were seeing. PREHEND them? Well, we kind of did, because the court systems were shut down and cases in litigation tended to get continued and so, you know, plaintiffs had this uncertainty of I'll never get my day in court, or I'll never force this defendant to make a larger offer, so maybe I have to concede need. So we did see a period of time where we settled cases because of the uncertainty of when the courts would open up. Now they have opened up and the verdicts that are coming out are a bit scary. HMM. Scary, and that going back without any going back to where they were, you know, January twenty or they're actually getting worse because they're just sensitivity around the PLANEFF has grown. Yeah, I think the ladder. I don't think it has to do with the pandemic, but give you I found out about a verdict yesterday. That was a nontrucking case in Corpus Christi, Texas, and it was a dram shop case where, you know, somebody driving automobile was overserved and they end up killing two people. The verdict in that case was three hundred and fifteen billion dollars. Wow, and yeah, so it's like Whoa, wait a minute, you know, where did that come from? And again, I don't think it had anything to do with the pandemic. I think it has to do with a lot of the reasons I was given you earlier, that a jury is just looking at Corporate Americas saying A, we're holding you accountable and, Oh, by the way, we think you have a lot of money, so we're going to hit you with this big verdict in just saying and that was in Texas too. So that's happening in Texas. You know that. And so here is like a California. Otherwise you're in serious trouble. Yeah, Texas seems to be the more problematic state. It is for us because we run a lot of miles there. There are some arrogant plantiff attorneys who personally, my opinion, they don't necessarily care about their clients. They're more concerned about their own ego and getting a large number. But we have seen there was recently a billion dollar trucking verdict in and I can't remember the name of the county just north of Jacksonville. That came out a couple of years ago, excuse me, a couple months ago, on a truck in case. And haven't seen a lot of large stuff coming out of California lately, but I'm sure it'll be coming at some point. So how do you you know, how do you get ahead of some of the is the Queens in general, maybe this severity, I know, and the media. Autonomous Driving is taken on a whole, just in general, not a sort of specific to trucking. Sure that there may be a component of predictive modeling that may be able to revise support and preventive preventing certain events. Where are you are you will seeing the opportunity? Well, there's a lot of areas of opportunity and without putting on a commercial for some people.

I'll try to explain. But first off, in the trucking world, as I mentioned at the beginning, it's a highly regulated industry and how we hire our drivers, how we train our drivers, how we manage our drivers, how we entrust our drivers, you know, all has a big role in the outcome of a case. So my advice to anyone dealing with the large trucking loss first thing to do is look internally, look at your own records, in your documents and determined do you have something that is bad and address it right away. And and you know ninety nine times of a out of a hundred that planeup attorney's going to find these things anyways. So you might as well address it and come forward and speak with the plane off about it to try to get ahead of it, because if something like that eventually gets to trial, jury is going to get angry and when the juries get angry they give large verdicts. So first thing, you know, look at what you have internally. You know from all those perspectives. Secondly, obviously engage the other side and develop a relationship with them and, you know, be transparent, you know, show your honesty and show who you are and show that you're not some slaves ball sitting behind a desk. But we do if cases get further into litigation. We've also done non litigated cases. will do our focus groups and our mock trials and we're working with some vendors who do that. So you know, we're trying to stay on top of that stuff. In other words, if something's going to trial, we pretty much know what where it's going to add, if it goes in that direction, and I'll quote myself, I often say that which I don't know is what concerns me and if I don't know what's going on and if I don't have a grasp for something, and that's what concerns me. Using that as a tool to determine, you know, obviously outcome and the risking exposure, but I would imagine your settlement opportunities and other an even probably preventative for future events. That The p Yeah, okay, yeah, I'm working with a vendor now on predictive modeling for claims. There are some groups out there that are developed in some pretty good stuff to help us to get inside into could be the venue, could be the plantiff attorney, could be just facts about our case. Could be the injury where it's giving US intelligence to know cases that maybe we should settle it, you know, up front and maybe offer more money than we'd be comfortable with at the beginning. But you know, the outcome, according to the predicted modeling, could be allowed worse. So looking at doing that, I think there's great value in that and the trucking industry there's similar things for predicted modeling features for like drivers, you know, knowing a driver that might have an accident and dealing with that or knowing a driver who might quit and knowing how to deal with that on the forefront. So I think that intelligence is certainly helpful. It's on is an exposure change for you as employer, I guess. Are All drivers employees? Are they contractors? As a risk change, if their contractors, how is that her work? Yeah, it's a combination of both. But of all of our fleets, which probably Tfi's probably about twenty fourzero trucks, maybe more, you know in north of in Canada and the US, but I'd say significantly more employee drivers. But the issue, even if it is an independent contractor, we're still vicariously liable for their actions. So while they're operating a truck under our authority. So essentially, from a liability perspective, it doesn't matter. We're on the book. Got It? Okay, okay, interesting, all right, so last special three times. So when I when I look out future...

...state, I mentioned the Times driving before. Is that real fort is that a real future? First for trucking? Does it? I would assume it minigates your your wrist to degree, but I would also imagine to provide some new exposure in a way that maybe we haven't thought there yet. What are you what are your thoughts on where that are going? I think in trucking your two bits biggest expenses are fuel and wages. And if you think about say you have an elect trick truck with no driver, you know you're you're eliminating some of those big expenses, right. So why wouldn't a trucking company go down that road? So I think that is the future. You know, a couple of years ago we were talking like it would be here really soon, but I think we're still, you know, good ten years away from that. You know, where does that open us up to? Well, technology has been significantly or has impacted us in a positive way over the past couple of years, that technology being cameras, and cameras work well with from an exoneration standpoint, but also a coaching standpoint, and with that coaching we make our drivers better. But also collision mitigation, you know, just like on a lot of newer cars, we have that in our trucks and we prevent the rear in crashes from happening. But we also have lane departure and other things like that. So that technology is here today and as made a difference. Autonomous trucks would be a driver list truck, and there's various categories of that, but you know it. Hopefully you take a lot of the human element out of it, out of the situation, and if your truck is following the route in its internal GPS and it has collision mitigation to keep it from her ending someone, I think we'd say a yeah, you're in good shape if you're doing that. But you know what, we know that machines break, we know that things can go wrong. I know some of the autonomous car operations have had serious crashes and you know those bugs are still being worked out. So I think it'll reduce our risk. It won't totally eliminate it, but it also shift the risk. You know, you think about while maybe you take the risk away from the trucking cup and he's suddenly you have, you know, mechanical failure and then you go after manufacturers. So you know the risks will be there. I think it'll just shift different type of risk. And I'd imagine there's something. We have autopilot today, right. I mean not. I mean obvious the cruise control exists, but there's some degree of kind of automated driving or with a driver today or now. Yeah, they do exist and they're still being tested. There's also something they call platooning, where one truck follows another and you may have the lead truck in front and that's being operated by someone who's in control, and then the truck following that would have a driver at the ready, but that truck is essentially mirroring what the truck is doing in front. That is extremely interesting. I've not heard about that. PLA Tuning interesting interesting. Yeah, it's it. It's not as common as, you know, we think it would be, but I mean that might be the next step. So it's on. Let's say you're on your guest on short tank you're going to get a few million of potentially of a billion pending on a need in the space. What would you look at investing that money and, you know, for kind of future state of trucking? What's most intriguing for you personally? Yeah, boys, something that could put more drivers and seats. The industry is...

...short drivers. I can't remember the number. That number continues to get worse and worse every year. If you could find a way to attract the industry to people, whether it's, you know, a person having an interest in truck driving and if you could get more and more people interested in it, that would be, you know, wonderful thing. I think many people try, but not all of us are are succeeding in doing that. But you know, there's so many things about you know. I guess I would look for something that would sell an environment for a truck driver to live in, you know, from a from a lifestyle standpoint. You know, our trucks currently are more or less the drivers home. You know where they have, you know, two beds, you know an upper and lower bunk, you have a refrigerator, you have a microwave, you have a TV. You know, we have some trucks with satellite TV, and so you're trying to give the comforts a home, but we're also trying to create a good environment where drivers can feel like they're connected with something or like they're at home, and I think that's what our industry needs to do better. And I guess if I'm not Charuk tank, that's what I try to sell. I having maybe honest something and we reach out to I HGTV and that you know they did this. They were throwing out the tiny homes approach. Maybe is a new version on recreational vehicle. mottle hole I had in all series is I think you actually I think there's plenty of people that would love to explore the country, or even North America for that matter, that you know, if it's position or right away, would absolutely take that on if they were in right up a vehicle. Yeah, and it that's part of it, but it's a difficult lifestyle. Yeah, and you're away from home. I often say I'm a failed truck driver. I actually one thing you don't know about the mark. I went to truck driving school and have a degree in truck driver training and but I had a young family at the time and it was difficult to be a father and a husband and to be a truck driver. And a lot of the same thing holds true today in that it's not a lifestyle for everyone. So again we have to make it as an industry. We have to make it attractive to people to want to be there. You. I actually forgot about this. For myself personally, my grandfather families from Jamaica. Originally my grandfather was a truck driver in Jamaica. My father, or am I uncle at this, and my cousin actually, for that matter, all truck drivers are have been, excuse me, at some point in there in their lives for different types of truck. So I can definitely appreciate what you're saying on it's a different type of lifestyle. It's not, and I know no one really works at ninety five anymore. This is even more different than that. It's it's taxing, for sure, but you mentioned earlier, I mean getting to see the country, you know, just various experiences. It's exciting and it's fun and while I don't drive a truck anymore, I pull a travel trailer with a pickup truck and I kind of I guess we live those moments of being a truck driver and I enjoy it. It's just fun to behind the wheel and be on the road. thanksllent Tom. Thank you so much. Thank you so much for your time some time. I know that we actually we go to trade shows often and a top of that does come up is, you know, expertise within the space and to degree that that you're willing to have be a part of speaking engagements or just be involved in response to May pots that have questions in the spaces are a good way to contact you to good to reach out as Linkedin the best way or yeah, I'm on Linkedin, or feel free just to reach out via email. It's t mclau Ghli and add TFII and Tlcom. I'm active in the industry through organizations like trucking Industry Defense Association, CLM and so on and love speaking with people. Matter of fact, my son yesterday that I mentioned, call me about something and we talked about the difference between a bond and...

...collateral and it was just he was all excited to talk about, you know, such a fun subject like that, but it was just great to talk about that stuff and maybe leave it with this mark. Great Advice that my dad gave me, which was always have somebody to go to when you have a question, and that's how I've I feel I've gotten to where I am in my career because I always had someone to reach out and to ask a question. So I always feel free. You know, I'll try to get back to you as quickly as I can, but just yeah, give me a give me a shout out. Happy to try to answer a question and help out. Thank you, Tom Thank you appreciate you taking time with us today. All right, thank you, mark. You've been listening to be on the claim a podcast for risk and claims leaders. To ensure you never miss an episode, please subscribe to the show in your favorite podcast player, if you use apple podcast. We'd love for you to give us a quick rating for the show. Just tap the number of stars that you think the podcast deserves. Until next time, stay curious and keep innovating.

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