Owner Operator Teams On The Rise
March 15, 2018
Author: Ben Droessler
ELOG enforcement has driven many motor carriers toward using team drivers. In certain scenarios, teams are the only option to make the delivery window. Owner operators are responding to this need by teaming up to split costs and generate more income. Below are questions and considerations for motor carriers using owner operator teams.
Who owns the truck?
Ideally, the team forms a company (partnership or LLC) and puts the truck in the company’s name. If just one person owns the truck, that person should form the company. Your operating lease should be in the company’s name. Creating a business-to-business relationship helps reinforce independent contractor status and allows insurance policies to respond properly.
How are you paying the owner operator team?
Paying the owner operator’s company is best. In-turn the owner operator’s company should pay and issue a 1099 to each teammate. Again, this reinforces contractor status and properly aligns drivers for occupational accident eligibility. Owner operators show proof of PIP coverage under their own personal auto liability policy if they are residents of a PIP state.
Teams increase the motor carrier’s risk of being sued for negligence by an injured, off-duty team driver.
In these cases, the injured driver is not claiming they are an employee, but rather a third party injured by the negligent acts of the motor carrier’s driver. Plaintiff attorneys are actively pursuing these actions and winning. Be aware your auto-liability policy may be more at risk when using team owner operators.
Contact Ben Droessler with Cottingham & Butler’s Contractor Services Team.
Ben Droessler CIC
Vice President, Independent Contractor Risk