Higginbotham has made its transportation specialty practice a full division.
The move comes as freight brokers, motor carriers and their insurers adjust to a Supreme Court ruling that has removed one of freight brokers' main legal defenses.
The new Transportation Division has 31 staff with a combined 372 years of transportation insurance experience. Higginbotham said division status gives the team more scope to invest in transportation-specific staff, services and industry initiatives. These include a version of its Day Two Services claims and loss prevention model, staffed by people with transportation backgrounds.
The practice originated at Memphis-based Lipscomb & Pitts, which partnered with Higginbotham in 2020. Brent Allred, a managing partner based in Chattanooga, took over in March 2021. Fourteen staff joined in his first 10 months, more than doubling the team, and the group has since expanded across the Southeast and Midwest.
"Transportation insurance is a highly specialized business," said Rusty Reid, Higginbotham's chairman and CEO. He said the claims, legal environments, insurance markets and operating risks were all different from other lines.
The legal backdrop has shifted sharply this year. On May 14, the Supreme Court ruled unanimously in Montgomery v. Caribe Transport II that the Federal Aviation Administration Authorization Act does not shield freight brokers from state lawsuits claiming they negligently hired unsafe motor carriers.
The case was brought by a truck driver who was seriously injured when his stopped vehicle was hit by a truck operated by Caribe Transport. He sued the freight broker that arranged the load, arguing it should have known the carrier was unsafe. Federal regulators had given Caribe a "conditional" safety rating, citing deficiencies in driver qualification, hours of service and crash rates.
For years, brokers had relied on federal preemption to have such claims dismissed. Writing for the court, Justice Amy Coney Barrett held that negligent hiring claims fall within the law's safety exception, because choosing a carrier directly concerns the vehicles that will be on the road. The court left open whether preemption could still apply to loads moved entirely within one state.
"After Montgomery, transportation brokers need to think more carefully about their own exposure," Allred said. He said the ruling could affect the insurance brokers carry, the requirements they place on motor carriers, and ultimately the shippers whose freight is being moved.
The ruling will be a central topic at Higginbotham's ReFuel Leadership Conference in Chattanooga on October 27 and 28. The agenda also includes a panel with leaders of the Tennessee, Georgia and Alabama trucking associations on working across state lines.
For insurance brokers with freight brokerage and logistics clients, Montgomery turns carrier selection into an exposure that underwriters will price. Freight brokers that previously relied on preemption may now need contingent auto liability with higher limits, and underwriters are likely to examine how they vet carriers. That includes whether they check safety ratings, insurance and authority, and whether they keep records of those checks.
Pressure is also likely to move down the chain. Freight brokers may tighten the minimum insurance and safety standards they require of motor carriers, which could squeeze smaller carriers already dealing with high auto liability costs. Shippers who arrange their own transport may face questions about their own selection processes.
Brokers who can help freight clients document a defensible carrier vetting process, and pair it with appropriate contingent cover, will be best placed to keep those accounts insurable at a reasonable cost.
