December 4, 2024
Understanding the Importance of Cross-Border Insurance in a Complex Market
As trade between the U.S. and Mexico continues to thrive, cross-border freight volumes are surging in 2024. However, this growth comes with challenges that demand careful attention, including visibility, safety, cargo theft, and insurance coverage. Reliance Partners is at the forefront of helping shippers, carriers, and brokers navigate these complexities, ensuring smooth and secure cross-border operations.
Why Cross-Border Insurance Matters
Mexico presents unique risks for freight, including a high rate of cargo theft. Data from Reliance Partners’ Cargo Truck Hijacking Portal revealed a 3% increase in reported hijackings in 2023. With the stakes so high, having the right insurance coverage is essential, but it’s equally important to know where that policy is underwritten.
Mark Vickers, Reliance Partners’ Executive Vice President and Head of International Logistics, stresses the importance of aligning with a U.S.-based insurance provider for cross-border operations. Unlike Mexican-based policies, U.S.-issued Mexican cargo insurance ensures claims are resolved in the U.S., providing more reliable outcomes for shippers and brokers.
Key Differences in U.S. and Mexican Policies
Mexican cargo insurance policies often carry significant limitations:
- Lenient Liability Requirements: Mexican carriers’ liability for cargo damage is capped at approximately $1,250 for a 40,000-pound load—far less than the actual value, which averages $60,000 to $130,000 per shipment.
- Numerous Exclusions: Many Mexican policies include burdensome documentation requirements and exclusions, creating hurdles for claim payouts.
- Negligence-Based Liability: In Mexico, carriers are only responsible for damage caused by negligence, leaving shippers at risk.
Without comprehensive insurance, disputes over financial responsibility for damages often arise, delaying resolutions and straining cross-border partnerships.
Reliance Partners’ Solution: Borderless Coverage
To address these challenges, Reliance Partners developed Borderless Coverage, a solution designed to ensure seamless insurance coverage across borders. This program connects shippers, carriers, and brokers with U.S.-based underwriters who specialize in Mexican cargo insurance, removing the uncertainty of traditional policies.
Borderless Coverage provides critical benefits:
- Expedited Claims: Claims are paid directly to the shipper, allowing uninterrupted operations while Reliance Partners works to recover costs.
- Transparent Policies: Pricing reflects the realities of cross-border risk, ensuring shippers aren’t left vulnerable.
- Simplified Coverage: Policies eliminate the need for carriers to meet unrealistic requirements, reducing disputes and fostering collaboration.
Vickers emphasizes that Borderless Coverage allows companies to focus on growth and capacity rather than navigating insurance pitfalls. This is especially critical as nearshoring initiatives drive cross-border trade, increasing the need for robust partnerships.
Join the Conversation at the 8th Annual Modernization of Cross-Border Trade
To support the industry further, Reliance Partners will host the 8th Annual Modernization of Cross-Border Trade event in Laredo, Texas, on June 17, 2025. This event will explore topics like:
- Preparing for the 2026 United States-Mexico-Canada Agreement review.
- Cross-border warehouse strategies.
- Practical technology solutions for 2025.
- Customs brokerage best practices.
With expert speakers and insights from top organizations, this event is an essential resource for anyone involved in cross-border trade.
For a deeper dive into this topic, check out the full article on FreightWaves: There’s No Substitute for the Right Cross-Border Insurance.
