Prime Lease Update

So aren't the drivers legally bound to carry Worker's Compensation, or have it provided by their employer, whomever pays for it?

The direction of this discussion can be summed up by Eric G's quote below:

You have to be business minded.

You have to know basic business principles. And not just know them, but have the experience to implement them successfully. From what I've gathered on this forum, many owner/operators and lease operators have never created and implemented a business plan. Many apparently don't even understand a simple profit and loss statement.

Any business involves risk and trucking involves probably more risk than most small sole proprietor businesses. If you can allocate risk to someone else, you make more money. Its the foundation of the insurance business. There are "reinsurance companies" that cover losses of insurance companies when the primary insurance company has to pay a huge claim. Prime is self-insured because they have done an analysis to determine that it is cheaper to pay claims than paying an insurance company. And they can control the risk. And part of their business model is to transfer that risk to owner/operators and lease operators. Eric you are part of their risk allocation strategy. You are an integral part of their business model. They don't want you to focus on the risk that you bear. And most owner/operators and lease operators don't focus on it. But when they do have that $50,000 damage claim, or a big ticket maintenance item, the reality comes crashing down. I really hope things continue to go well for you Eric but the statistics don't bode well.

Workers Comp is mandated by the laws of the land and are more costly for the employer, but companies with L/O and O/O that are considered independent contractors offer them the Occ/Acc. Lawyers have found a way around that and are very successful into turning an Occ/Acc claim into a WC claim which is why most companies get a contingent liability policy to cover their back. If you are a Motor Carrier and provide occupational accident insurance for your 1099 drivers, make sure that you are completely covered. A smart occupational accident policy includes a contingent liability provision that protects you if your leased/contracted drivers get injured and claim that they are actually employees and should be covered by your Workers Comp policy.

Make sure that your limits are high enough to meet all the minimum requirements in your state.

So aren't the drivers legally bound to carry Worker's Compensation, or have it provided by their employer, whomever pays for it?

Man, this lease thing is sounding better all the time!

I want to stress to anyone who is considering a lease that the companies set these up for their own advantage. Yes, they want you to survive as a lease operator, but only because it will help their own business make more money.

No one in business ever wakes up in the morning and asks themselves, "What can I do today that will help another business make more money while I make less money for myself?"

No one.

If a business offers you an opportunity to go into business for yourself in a way that serves them, you must understand why. They're not doing it out of the goodness of their heart. They're doing it to make more money. They may be:

• Pawning off the risk onto you
• Pawning off the lower-performing aspects of the industry onto you
• Asking you to do something they don't have the expertise to do themselves

There's a reason they want you to go into business in a way that serves them. If you don't know exactly why then you're wandering blindly into a partnership that was set up to use you to their advantage.