November 6, 2024
Cargo Insurance Explained: Why It’s Essential for Motor Carriers
Cargo insurance is one of the most critical components of a motor carrier’s operating budget. With rising costs in today’s trucking market, it’s essential to understand what cargo insurance does and why it’s indispensable. At Reliance Partners, we’re committed to equipping carriers with the knowledge and tools they need to navigate this challenging landscape.
What Is Cargo Insurance and Why Is It Important?
Cargo insurance protects goods or the property of others while they are being transported. Andrew Haun, our SVP of Sales and Strategic Accounts, explains:
“At its most basic form, cargo insurance protects goods or the property of others while being transported. Carriers need insurance because while the cargo is under their care, it’s their responsibility.”
Consider this: a 10-unit trucking company could be responsible for $1 million worth of property at any given time. That level of risk underscores the importance of having the right coverage in place.
Coverage and Compliance
While liability insurance is federally mandated with a minimum of $750,000, cargo insurance operates under different guidelines. Certain states have their own requirements, and specialized cargo (like perishable goods, hazardous materials, or high-value items) often requires additional endorsements and equipment.
Tailored Policies for Specific Needs
Not all cargo insurance is created equal. Reliance Partners emphasizes tailoring policies to meet individual carrier needs. For instance, a carrier hauling dry van cargo may have very different requirements compared to one handling oversize loads or hazardous materials. Our expertise ensures that every policy addresses unique exposures and risks, avoiding costly gaps in coverage.
Claims and Relationships
Speed and efficiency in claim resolution are vital. As Haun notes:
“The number one thing is speed of claim adjustment. Making the broker whole so that the shipper/receiver is whole as soon as possible is crucial to maintaining good relationships. Coverage should be evaluated not just by price but by the ability to protect your business.”
One large claim can cripple a small or medium-sized carrier, especially if the carrier is not adequately insured.
Rising Challenges: Cargo Theft and Natural Disasters
Cargo theft continues to drive insurance rate increases, with some insurers even excluding theft from standard policies. Reliance Partners helps carriers navigate these exclusions by recommending tailored solutions to reinstate theft coverage where necessary.
When it comes to natural disasters, carriers benefit from the protections of the Carmack Amendment, which limits liability for certain events like acts of God or public enemies. However, careful policy planning is still essential to ensure comprehensive coverage.
Why Choose Reliance Partners?
At Reliance Partners, we specialize in helping carriers select the right cargo insurance policies to safeguard their operations and ensure peace of mind. Whether you’re navigating theft exclusions, tailoring specialized coverage, or managing claims efficiently, our team is here to support you every step of the way.
