Ive got a client who is sueing me because his car didnt show up. It was a dispatchers mistake and I took the guy to the airport for free later in the morning so he could get on standby. He couldnt, so we gave him another ride home for free. Now he is sueing me for airfare plus the "cost" of the trip to the tune of $1600.
Has this ever happenned to anyone and what was the outcome?

I do carry General Liability and was not aware that it might cover this sort of incident. I will call my agent to see if there is an Errors and Ommissions portion to the type of liability I carry. Thanks to everyone for the continued brainstorming. Policy changes have already been put into play as a result of the collective advice.

Gibbs did mentioned in one of his post that he felt that if his car was not avaliable that the Chauffeur should have used his own car to take the Limo Companies Client to the airport. I was responding to that.

quote:

Originally posted by David Merrill:
I can see where E&O insurance could cover your liability if you forget to pick some one up for an AP run at 5:00 A.M. but I fail to see where it would cover your liability if you are transporting a passenger for compensation in a non DOT authorized or under insured vehicle.

I fail to see the correlation with Cme4limo's response to Gibbs thread context of being sued for non-performance & passenger liability insurance. In other words, the thread subject matter is being held liable for for financial injury due to non-performance & an answer of having E&O type insurance is an appropriate response. It would not be appropriate if the subject matter presented by the thread originator was passenger liability insurance.

I can see where E&O insurance could cover your liability if you forget to pick some one up for an AP run at 5:00 A.M. but I fail to see where it would cover your liability if you are transporting a passenger for compensation in a non DOT authorized or under insured vehicle. The oly thing I could see the insurance company doing is reducing the liability limit to coincide with the premium paid, I know if you understate the type of use on your POV like saying you drive 5 miles a day to and from work when you actually drive 50 miles a day, they base your liability limits on the amount of premium paid for the type of driving you do. Lets say you have 2 million liability if you declare you drive commercial but if you decalre you are private use and yo pay for that your liability may end up being $100K.

quote:

Originally posted by David Merrill:
Let me see if I have this correct. Purchase inexpensive general Liability insurance and have the Chauffeurs drive the people around in their own cars. If this is possible then why are we required to have state Authority and purchase outragiously expensive insurance to operate a Limo business? I can understand what Jim is saying here that he has "EMPLOYEE" use their own cars for non passenger transportation because a bank deposit will not sue you but what about Dr. So and So riding in a non authorized car not covered under the companies passenger transportation policy. Will the insurance company stand behind you? Sounds pretty scarey to me..

Negative, you can purchase what is known as "errors & omission" insurance that will cover claims of financial injuries. This type of insurance is common in Real Estate as a CYA for Realtors.

Instead of regulatories forcing carriers to maintain liability insurance 10X or more then the civilian populance how about E&O or performance bonding to offer the travelers financial protection.

Let me see if I have this correct. Purchase inexpensive general Liability insurance and have the Chauffeurs drive the people around in their own cars. If this is possible then why are we required to have state Authority and purchase outragiously expensive insurance to operate a Limo business? I can understand what Jim is saying here that he has "EMPLOYEE" use their own cars for non passenger transportation because a bank deposit will not sue you but what about Dr. So and So riding in a non authorized car not covered under the companies passenger transportation policy. Will the insurance company stand behind you? Sounds pretty scarey to me..

Another suggestion is to buy General Liability insurance. This would cover situations like this and it is very inexpensive.

Don't try to do early morning unless you are set up for it.

This message has been edited. Last edited by: Dean Schuler,

Not that I advocate putting a client in a POV but if one of my employees did that, the chauffeur and the client are covered. I pay for non-owned auto insurance for a variety of reasons. Primarily because I routinely ask my employees to perform company business such as sales calls, bank deposits, trade show representation at a booth, dropping off articles left behind in cars are homes and businesses and if anyone got in a crash performing any of those activities, I would be liable. The policy I have covers them performing company business in a personal vehicle which I don't own.

Gibbs: You said the Chauffeur should had gotten int his OWN car and driven the Client to the Airport? The $1,600.00 you may have to pay out now would be nothing to what you would have to pay out if there was (God forbid) an accident. Your Clients name would had been on the front of your building and he would be living in your House while you are sleeping on a Park Bench.

If you cannot be, like Wade said A true 24/7 operation, perhaps an alliance with a Taxi Company (I know Gunny) or a Tow Truck operation where you pay them a fee for service to provide 24/7 Dispatch operation would be in order.

You know this reminds me that alot of folks in this business think the worst thing you can tell a client is NO. This is really not true. The worst thing is to promise and not deliver. If we are busy we simply turn down those 4:00AM runs if we can't handle them. In most cases they aren't worth the trouble. The chauffeur is ruined for the rest of the day and it will give you a heart attack worrying about them showing up. This is unless you are a real 24-7 operation which there are really very few in the country. And what I mean about a real 24-7 operation is a live dispatcher inside a company building with chauffeurs on standby. Not the owner or employee answering a forwarded phone or cell phone from home.

You should have a lock box with access to all keys for all chauffeurs. If you can not trust them, fire them. I could not imagine only putting keys out on a per job basis. What do you do in case of changes or last minute requests by regular clients ?

We have 3 - 4 runs every morning before 7am. I could imagine the phone calls every day if I did not have systems in place or chauffeurs I trusted to make a quick decision that was in the best interest of the client and the company.

more info on this: yes, we do have an 18 vehicle fleet, but this was at 4:45 in the morning and the driver did not do as he should have: which is get in his own car and at least get the client to the airport. Our office (which contains keys to other vehicles) did not open until 7 AM.

I think everyone is right though, I have to reimburse his evidenced losses.

I will also have to take steps so that in the future, all early AM drivers on duty have keys to more than one vehicle.

KC: Just boils down to what did the Client do to mitigate damages. If he did nothing well Gibbs may stand a good chance of winning here.

Another point you make here is the small operator who thinks he can make it with one car. Here is an example of what can happen if you only have one car. Lets say late at night the one car brakes down and things fall through the cracks. Well here is what can happen. You probably could drive your unauthorized and uninsured POV and get away with it but "WHAT IF" there was an accident. A one car operation just won't cut it in this business. You NEED to have a back up car or at the very least a back up Plan like a good relationship with a competetor or the local Taxi operator.

quote:

Originally posted by Gibbs:
I took the guy to the airport for free later in the morning so he could get on standby. He couldnt, so we gave him another ride home for free.

I'm not a lawyer by any means - so please correct me if I'm wrong. Since you provided the passenger with two free trips (not just the one as arranged) and the passenger accepted the free trips, wouldn't this be in lieu of monetary compensation?

Also, if this trip were so important to the passenger, if my car didn't show up (and the passenger was at home), I would have taken my own vehicle to the airport if driver didn't show up.

I also must add...I don’t want to sound like the devil's advocate, but situations like this can open your eyes to failures in your company’s procedures. Where was the dispatcher on duty at the time of the incident? If you were out of the country, who was on call? Who ever takes care of your vehicles, i.e. the fleet manager, really was the one who drop the ball – why didn’t he inform the office that the vehicle was out of service?

I don’t know the size of your operation, a small company would know if a vehicle was out of service – a large company would have a back up vehicle (even if it was a limo, suburban or van that was available - not all your vehicles are out in the early AM). But I don’t believe that the dispatcher was fully to blame.

This message has been edited. Last edited by: KC,

A scenario to ponder on:
A motor carrier enters into a contractual agreement (yes a reservation is a contract) to provide transportation for 4 persons 80 miles to an AP to catch a 0 dark 30 flight from the east coast to the west coast for further connections to catch a cruise ship.

The driver hits the alarm when it goes off & at 0400 there are 4 people standing outside the house wondering where the transportation is. After unsuccesful attempts to contact someone they finally reach the local cabbie who dispatches 2 cars because one will not handle 4 passengers & all the luggage. As the folks pull into the AP they get to wave goodbye to their plane taking off. Missed transfer = missed flight = missed connections = missed cruise.

What would the liability be for the motor carrier/operator?

quote:

Originally posted by David Merrill:
Oh I wish I was a Cable Guy, then I could show up when ever I wanted to. Too bad other "Service" people are not held to the same standards we in the transportation business are. I like to use the line when a "service" Person I called shows up late for an appointment.

"Now lets say your Daughter was getting married at 2:00 on Sat., would it be OK if Ishowed up at 1:00 on Sunday? I rest my case."

Just in case David:
Touche' - used to acknowledge a hit in fencing or the success of an argument, an accusation or a witty point.

Just in case

Inconvenienced or Damaged?

To be sure it was a screw up and you should take every effort to make it right.

But to even try to sue I would think first of all he would have to prove actual monetary damages. A $1600 airfare doesn't sound like a non-refundable ticket to me. Do you know for sure the status of the ticket? What were the other costs of the trip included in the $1600 that he can demomstrate were 'lost'.

If he can get a refund or use the ticket on an alternate date he suffered no real monetary damage. Even if they couldn't get him a flight out on the original date he could possibly use the ticket on another date or get a refund.

You could also try talking to the airline to see if there is anything they could do on your behalf (ie throw you a bone...)

Hope you can make him happy without going to court.

Oh I wish I was a Cable Guy, then I could show up when ever I wanted to. Too bad other "Service" people are not held to the same standards we in the transportation business are. I like to use the line when a "service" Person I called shows up late for an appointment.

"Now lets say your Daughter was getting married at 2:00 on Sat., would it be OK if Ishowed up at 1:00 on Sunday? I rest my case."