Owner operator agreements have changed dramatically over the past 20 years. Agreements once considered sealed with handshake are now replaced by detailed, thoroughly vetted contracts. With so many laws and regulatory changes a new level of sophistication and understanding of law is needed to get the protection you need as an owner operator. In all cases, it is recommended that before you engage in any agreement, you have your attorney review the language to protect your business interests.
Here are a few issues owner operators should consider:
- Owner Operator agreements are contracts and like all contracts, they should be reviewed by a qualified attorney.
- All agreements should address payment and work matters, including work hours, license plates, type of equipment, required insurance, communication equipment, penalties, etc.
- Owner operators are not employees but often have very close relationships with their clients. Relationship management should be discussed and clearly defined between the owner operator and the hiring company.
- Many fleets have specific insurance requirements for their owner operators. These can include occupational accident insurance, bob tail coverage, cargo insurance, and possibly physical damage insurance. The fleet cannot require the owner operator to purchase the insurance through them, but can make it advantageous to do so.
- There can be no forced dispatch of owner operators. They have the right to refuse loads based on a business decision. There is often a very thin veil between an owner operator and a company driver and it cannot be broached. This is a major issue in the Fed Ex case that is working its way through the courts.
- If the owner operator has drivers working for him/her, the will need to meet company standards. These can include age, moving violations, experience, and others. Also, depending on the size of the fleet, the owner operator may be required to purchase workers compensation or occupational accident insurance coverage for their employees.
- There will continue to be challenges to owner operator agreements throughout the country, especially on the West Coast with the LA ports and Fed Ex suits.
HUB International Transportation combines national reach with local service to address the needs of large fleet, small fleet, and single owner trucking operations. We have exceptional market access, educational resources, and a deep bench of experts who are solely focused on serving the trucking industry.
Steven Bojan, is the Vice President - Fleet Risk Services, for the Risk Services Division HUB International. To reach Steven or a local HUB risk services expert click here.