BOSTON — To bring themselves in compliance with federal regulations, officials at Boston’s Logan Airport have been raising vehicle insurance minimums for livery companies serving clients there.
Liability requirements rose from $250,000 to $1 million per car in January 2003 and are set to reach the national standard of $1.5 million in October of this year.
Fearful that these insurance hikes could prove fatal to a significant portion of its membership, the New England Livery Association was calling for relief from insurance companies and has contacted governmental agencies.
Jim Cotter, NELA board member and owner of Suburban Livery in Wakefield, Mass., noted that the new requirements would particularly affect smaller operators, who are not eligible for fleet rates because they run less than five vehicles.
With only a handful of insurance carriers now providing livery insurance in New England, many operators may not even be able to get insurance, he added.
Insurance companies have historically only written smaller companies at lower limits (from $250,000 to $500,000), due to perceived risks and past accident data.
The larger limits are scaring off insurance carriers and forcing operators into the involuntary market pool.
Cotter noted that his own insurance costs would double if he was forced to use involuntary pool coverage.
Cotter credited NELA president Larry White and insurance specialist/past-president Larry Wilwerth with holding the involuntary pool to a 75% increase over the last two years, as opposed to a proposed increase of 225%.
Even so, shifting to the involuntary pool could be crippling for many operators.
If that’s not enough to deal with, Massachusetts operators may be facing a potential excise tax increase on limousine sales.
The plan is to link the tax to bluebook resale values, which could cause the cost to triple for operators, making fleet rotation much more expensive.
NELA officials said they were voicing their opposition to decision makers and were consulting specialists on tax issues.