November 16, 2020
Motor Truck Cargo Insurance
Reliance Partners is a leading insurance agency when it comes to providing freight brokerage insurance. Several members of our executive team have spent years in the freight brokerage world prior to joining Reliance. We can empathize with the everyday struggle that many 3PL’s endure involving unpaid cargo claims.
Motor Truck Cargo Insurance is a requirement for any freight broker and there are several different options available in the marketplace. For many years there was only one coverage option available (Contingent Cargo). Contingent Cargo is designed to cover the freight broker on a contingent basis for cargo damage or loss.
This means that claims are typically filed first with the motor carrier in an attempt to recover. It is commonplace to see these claims denied based on exclusions that may be present in the motor carrier’s policy. There are many types of contingent cargo forms with various exclusion including “follow form” policies. This means that if the trucking company has a policy exclusion then so does the freight broker. It is very important that a freight broker understand what is actually covered if they utilize Contingent Cargo forms.
The industry has evolved over the past few years and there is now a first dollar product available for cargo insurance that is based on legal liability and can even be broadened beyond the legal liability trigger to cover a much wider range of cargo claims including items such as Driver Negligence. Driver negligence is almost always excluded under Contingent Cargo, but is typically covered under Primary Motor Truck Cargo irrespective of the motor carrier’s insurance provided that it is a covered commodity. The forms typically sold on a first dollar basis are extremely broad and provide coverage for a wide range of perils.
Call Reliance Partners today to learn more about Primary Motor Truck Cargo and Contingent Cargo options.