Freight Broker Insurance

Freight broker insurance plays a crucial role in the transportation industry, offering protection for businesses involved in arranging shipments between carriers and shippers. In the United States, regulations and risks associated with freight brokerage necessitate comprehensive insurance coverage. Here’s a brief overview of freight broker insurance in the US.

Primary Coverage Types:

1. Contingent Cargo Insurance: Protects against cargo losses while in transit. This coverage comes into play when a motor carrier’s cargo insurer refuses to honor a claim for lost or damaged cargo. It protects the freight broker who arranged for the truck transportation of others’ cargo against cargo damage claims, peril exclusions, commodity exclusions, lapses in a motor carrier’s policy, carrier insolvency and much more. Contingent cargo coverage forms are very different from carrier to carrier – be sure to work with a specialist to determine your specific needs.
2. Professional Liability (Errors & Omissions): insurance for brokers to cover their legal expenses arising from allegations of professional negligence or errors& omissions. Example of professional liability exposures are misdelivery, miscommunication, negligent hiring, discrimination and more.
3. General Liability Insurance: Provides coverage for bodily injury, property damage, and advertising injury claims against the freight broker.
4. Contingent Auto Liability Insurance: insurance for freight brokers designed to cover their auto liability on a contingent basis. The motor carrier’s auto liability insurance is always primary. The contingent auto liability is designed to pick up a valid claim in situations where the  motor carrier’s policy refuses to honor a claim, subject to scope of the policy terms.
5. Primary Truck Broker Liability: insurance for freight brokers designed to cover their auto liability on a primary. Covers bodily injury or property damage resulting from the ownership, maintenance and use of a motor carrier’s auto arising out of from the insured’s operations as a transportation broker. This coverage form is hard to obtain and reserved only for best-in-class brokerage and 3PL operations with proven  track record and solid risk management practices in place.
6. Surety Bonds: Required by the Federal Motor Carrier Safety Administration (FMCSA) to ensure financial responsibility and compliance with regulations.