On November 5, 2021, USTRANSCOM released the 2022 DP3 Business Rules, including the 400NG, Tender of Service, Claims & Liability Business Rules, and IT-22. This memo serves as the second in a series of three, in which we will discuss all relevant changes in the 2022 Business Rules. Please note that our discussion in these memos is not exhaustive, and we encourage you to review the business rules yourself in addition to our memos.
Claims & Liability Business Rule Changes
Please note that these changes will go into effect for all shipments picked up May 15th, 2022 and beyond:
Introduction
1.1.3.2. Will be no less than $10,000 per shipment
- Minimum coverage on shipments increased to $10,000.
Exclusions From Liability
1.4.1.6.1. Normal weather conditions such as heat, cold and humidity are not considered Acts of God
- Normal weather conditions rarely, if ever, relieved a TSP from liability on damaged items; however, it is our understanding that this change was added as TSP were denying damages based on normal weather conditions. If there is a situation that one of our agents or service partners experience that may fall in line with this new rule, please make sure to contact our Claims Department, so we can advise you how to handle the situation and document it accordingly.
Duty to Mitigate Loss/Mold
1.5.1. This section addresses mitigation efforts only (separation of items, wiping down and drying off of wet items). Nothing in this section authorizes moving forward with remediation of molded items. Remediation of molded items is addressed in 1.5.2 et seq. and requires authorization from the MCO before it may be commenced.
- TSPs must have authorization from the MCO before any mitigation efforts take place. We see this as a positive change, as the MCOs and TSPs should be working together to rectify a mold situation. This change puts more responsibility and accountability on everyone involved.
1.5.2.5.6. Accessorial services for mold remediation will not be paid nor used to reduce the TSP’s maximum liability if the TSP fails to obtain prior approval from the MCO. MCO approval should be determined within 10 GBDs of submission of written estimate by the TSP.
- This addition, like 1.5.1., adds more responsibility to the TSP and the MCO to coordinate their efforts in mitigation services.
High Value items and High Risk Inventories (multiple changes and updates)
1.8.1. Collections should be noted at pack out and preparation of the origin inventory. Simply listing twenty-two (22) pairs Nike sneakers or "Jordans" is not sufficient to establish that such items constitute a collection. The customer must be counseled by the pack crew to specifically identify and designate collections prior to packing, and such collections must be indicated on the high-risk/inventory form or origin inventory as appropriate.
1.8.3. The TSP will add all items requested by the customer or which the TSP observes are generally of the nature to fall within the rare, very high-end, highly pilferable, and/or expensive collectible item category and valued more than $100 per pound to the HVI sheets. Note that just because an item is worth more than $100 per pound, does not mean it must be listed on a HVI sheet for the customer to be paid more than $100 per pound, should it be lost or damaged. High value/high risk inventory sheets are for rare, very high end, highly pilferable, and/or expensive collectible items. When in doubt, the TSP should ask the customer whether he/she would like to add the item to the HVI list.
- It is very important that crews identify possible collections and items of high risk/high value. While we do not expect our packers and loaders to be appraisers, we do ask that closer attention is given to items that could be high risk or high value. Do not simply rely on the service member to point these items out, and if there is a question, please bring it to the customer’s attention. Our Claims Department is standing by to assist with any questions or concerns related to this change, so please do not hesitate to contact our office for guidance.
Catastrophic Loss and Payments (multiple changes and updates)
2.10.1. TSP is required to contact the MCO, the customer, the responsible PPSO, the respective Service Headquarters, and the Defense Personal Property Management Office, within one government business day of when potential catastrophic losses occur. TSPs will ensure MCOs, the respective Service Headquarters, and USTRANSCOM are included on all communications regarding settlement of a catastrophic loss. The TSP will provide a weekly update (at a minimum) to the customer, MCO, JPPSO, Service Headquarters, and USTRANSCOM.
2.10.3. Catastrophic loss occurs when an estimated 60% of the inventory line items in a given shipment are lost, damaged or destroyed. However, TSPs are free to declare catastrophic losses and make a partial payment at their discretion if the 60% threshold has not been met. MCOs may declare catastrophic losses and require a partial payment at their discretion regardless of the 60% threshold.
2.10.4. TSPs are prohibited from discarding items without the customer’s permission. The TSP is required to expedite catastrophic loss shipments to the customer’s destination as stated on the BL if possible, for inspection and removal of sentimental items by the customer. In the event the property cannot be transported, the TSP will be responsible for arranging a virtual inspection to identify sentimental items for removal by the customer in1 coordination with the local QA office.
- This section includes many positive changes including additional reporting requirements to all concerned parties, more MCO oversight and guidance, and a requirement that TSPs retain as much of the damaged property as possible for the service member to inspect/recover sentimental items.
Essential items
2.11.5. Essential items are only those items necessary for everyday living, which would reasonably need to be replaced promptly, if clearly damaged beyond repair. Items used solely for entertainment purposes are not considered essential. Fungible items that are regularly used up or worn out and must be routinely replaced are not considered essential.
- This change further assists the service member with getting settled into their new location by expediting such items – which now includes washers and dryers.
If you have any questions about the changes discussed in this memo, please reach out to ncs@ncsclaims.com. Be sure to read the rest of our memo series to stay up to date on the changes for 2022.
Memo 1 - 400NG & TOS: January 12, 2022
Memo 2 - Claims & Liability Business Rules: January 26, 2022
Memo 3 - IT-22: February 9, 2022
