August 30, 2017
Freight Broker Insurance
Working with a freight broker will be a common occurrence if you own or run a shipping company. They are an important part of the process if you want things to run smoothly and are fairly expensive to hire. A freight broker is essentially the middleman between a shipper and a carrier. They manage the interactions and inform the carrier where to go. This is why they are relied upon quite heavily and play an important role in the shipping and transportation industry.
However, although they play an important role, you still need to get insurance in case you mess up. There have been many cases where a broker has made an error and a carrier has not received an important shipment or the cargo is mistreated. In these cases, compensation needs to be issued out because people may have lost money. There are many different types of freight broker insurance and the industry is quite complicated in this respect. A number of the most common ones are featured below.
What Types of Insurance are Available?
There are a lot of different types of insurance available and this often confuses companies about which one they should get. There are, in fact, a number of dos and don’ts when it comes to freight broker insurance because you do not need all the necessary packages that are offered. You only need a select few. Here are a few of the main ones that you’ll probably see during your research.
- Property and General Liability – this liability insurance is there to cover all the areas outside the cargo and driving. It is actually an important one to have and is available to all individuals who own property associated with their base of operations. Property liability and general liability go hand-in-hand so ask your insurance company for quotes.
- Workers’ Compensation – Every State requires that if a company has employees, they should all receive workers’ compensation insurance as part of their contract, just in case anything happens to them during their shift that could injury them (physically or financially). The carrier also needs worker’s compensation insurance, otherwise, a written statement is needed.
- Contingent Cargo Liability – This one is in those cases where the cargo may have been lost, damaged or mistreated in some way. As the Broker, you’re responsible for the cargo and can be pursued if something goes wrong. Make sure you’re covered with this insurance in your policy.
- Contingent Auto Liability – This insurance protects you against third-parties and can be extended using an umbrella policy.
If you’re a freight broker you need insurance if you don’t have any. There are many misconceptions about freight brokers that shippers have and not only will have insurance put their minds at rest but it will also be there if something does go wrong. Freight broker insurance comes in all different shapes and sizes and you need to identify what you want in your policy. The important ones have been listed above and are the most necessary if you want to be protected against common problems, such as mistreatment of cargo.