Automated Excess Liability Coverage Assignment for Carriers
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Solution Overview
Problem
The shipping industry faces challenges with for-hire carriers struggling to obtain adequate excess liability insurance due to market and regulatory changes, leading to increased costs and difficulties in meeting varying state requirements, especially for smaller fleet carriers, which can result in delays and risks during trips.
Innovation Solution
A manager system that automates the process of matching carriers with loads by receiving trip information and get-load requests, determining if the carrier's excess liability coverage meets the trip requirements, and submitting requests for immediate digital provision of excess liability coverage, ensuring compliance and flexibility in meeting different requirements for each trip.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If carriers purchase annual excess liability insurance policies, then they have continuous coverage, but the cost becomes prohibitive and smaller fleet carriers cannot afford adequate coverage limits
Solution Approach 1:
The patent segments annual insurance policies into shorter-term coverage periods (e.g., monthly or weekly). This allows carriers to purchase only the coverage duration they need for specific trips or operations, reducing the overall cost burden while maintaining continuous coverage when needed. Smaller fleet carriers can afford these shorter-term policies more easily than comprehensive annual policies.
Solution Approach 2:
The patent implements dynamic insurance coverage that adjusts based on actual carrier needs, trip requirements, and risk profiles. Coverage limits and durations can be modified in real-time rather than being fixed for a year, allowing carriers to optimize costs while maintaining adequate protection during high-risk periods.
2Productivity
If carriers purchase higher excess liability limits to meet shipper requirements, then they can execute more trips, but the cost of insurance increases significantly
Solution Approach 1:
The patent applies different coverage limits to different trips or routes based on specific risk factors, shipper requirements, and cargo values. Instead of requiring uniformly high limits across all operations, carriers can purchase appropriate coverage levels tailored to each specific trip's needs, reducing overall insurance costs while maintaining productivity.
Solution Approach 2:
The patent allows carriers to dynamically adjust coverage parameters (limits, deductibles, duration) based on trip characteristics, carrier risk profile, and market conditions. This flexibility enables carriers to optimize the balance between coverage adequacy and cost, allowing them to execute more trips at affordable rates.
3Reliability
If the insurance marketplace increases premium rates and reduces capacity, then insurers protect their margins, but carriers face prohibitive costs and reduced access to coverage
Solution Approach 1:
The patent introduces a digital platform that acts as an intermediary between insurers and carriers. This platform uses algorithms to assess carrier risk profiles, match carriers with appropriate insurance products, and facilitate transparent pricing. The intermediary function improves market efficiency, allowing insurers to price accurately based on risk while maintaining broader access for carriers.
Solution Approach 2:
The patent implements self-service capabilities where carriers can independently assess their insurance needs, compare available policies, and purchase coverage directly through digital platforms. This reduces transaction costs and improves accessibility, allowing carriers to obtain coverage more easily while insurers maintain their risk management standards.
4Quantity of substance
If carriers circumvent states with higher excess liability requirements, then they avoid purchasing additional coverage, but delivery delays occur and trip purposes are foiled
Solution Approach 1:
The patent allows carriers to pre-purchase excess liability coverage through digital platforms before needing it for specific trips. Carriers can proactively secure coverage for upcoming routes or states with higher requirements, eliminating the need for last-minute purchases or route circumvention that would cause delays.
Solution Approach 2:
The patent replaces the traditional mechanical process of physical insurance purchases and paperwork with digital automation. Coverage can be purchased and activated electronically in real-time, allowing carriers to quickly obtain required insurance for any state without physical delays or administrative bottlenecks.
Data Source
AI summary
A method/system is provided for automatically managing a shipping system, including receiving trip information for a plurality of trips requested by at least one shipper and receiving get-load requests associated with a plurality of carriers to participate in an assignment process to be assigned to execute one or more of the trips. The method further includes tentatively assigning a carrier identified by a get-load request to a trip, triggering a determination whether an EL requirement for the trip is satisfied by an amount of original EL indicated for the carrier, and if not satisfied, requesting adequate immediate digital provision of EL trip coverage for the carrier, only assigning the carrier to the trip after receiving confirmation that the EL trip coverage can be immediately and digitally obtained, and otherwise blocking the get-load request associated with the carrier from participating in an assignment process to be assigned to the trip and/or other equivalent trips.