April 10, 2024

Navigating Insurance Costs for Expanding Operations

In today’s landscape where operational costs are under immense scrutiny, discerning which expenses to trim and which to prioritize is crucial. While it may be tempting to slash budgets across the board, insurance stands out as a safeguard against substantial losses for both motor carriers and freight brokers. At Reliance Partners, we recognize the importance of comprehensive insurance coverage, especially in an environment where risks such as theft loom large.

Jessie Merritt, our Executive Vice President of Sales at Reliance Partners, recently joined a discussion on WHAT THE Truck?!? to emphasize the significance of understanding insurance coverage in depth. “When it comes to scaling and expanding a trucking company or freight brokerage, ensuring your claims get paid is absolutely critical,” Merritt says. “There’s no one-size-fits-all approach to purchasing insurance, as long as you understand what you’re purchasing and what’s covered.”

For instance, many motor carrier policies include a towing supplement under physical damage coverage. However, this supplement often caps at $10,000-$15,000, potentially leaving carriers vulnerable to significant losses if the cost of towing exceeds this limit. While carriers typically have a better grasp of their insurance coverage, freight brokers have increasingly begun securing their own insurance to mitigate reliance solely on carrier policies.

Merritt dives into the three most prevalent insurance policies for brokers: contingent cargo, cargo legal liability, and shipper’s interest. Each type addresses specific scenarios, but understanding the nuances and common exclusions is essential to making informed decisions.

In instances of theft or loss, collaboration with local authorities is imperative, despite the overwhelming volume of claims. Providing thorough information for police reports and promptly retrieving stolen or lost cargo significantly enhances the chances of recovery.

To mitigate costs effectively, Merritt suggests several strategies for motor carriers, including considering deductibles or retentions, reviewing insurance policies to ensure competitive rates, and maintaining strong safety scores and inspection records.

The escalating trend of cargo theft underscores the urgent need for brokers and motor carriers to secure sustainable insurance coverage. As insurance companies grapple with increasing losses from theft-related claims, there’s a possibility of coverage restrictions in the future.

For further insights into insurance management strategies tailored to your operations, visit Reliance Partners.

To read the full article, visit our friends at FreightWaves.