There are many different policy types available on the market today, and deciphering which policies make the most sense for the size of your business and your shippers’ requirements can be dizzying. At a minimum we believe that all freight brokers should have three types of liability coverage to remain competitive and protected in the market:

• General Liability – This is the most basic type of coverage that all freight brokers should have, however many don’t realize that it is intended to respond to the financial risk that can be assumed for third-party bodily injury claims occurring on your premises. These policies are typically more affordable because of the relative low-risk of liability. However, it’s important to note that they do not offer protection for most litigation where a motor carrier is involved.
• Freight Broker Auto Liability – This type of insurance responds to defense costs from the first dollar plus any judgment levied when a freight broker is named as one of the defendants in a lawsuit related to bodily injury or fatality claims where a motor carrier is involved in accidents and third parties are injured or killed. When buying one of these policies, be sure to choose a plan that doesn’t have an “annual aggregate limit,” otherwise you may still find yourself paying out of pocket. It is better coverage to have an auto liability policy that covers up to $1 million per occurrence.
• All Risk Contingent Cargo – Moving freight with LTL (Less Truck Load) Motor Carriers necessitates a broader form of Shipper’s Interest coverage than what is typically provided. This insurance coverage is purchased on a per-shipment basis where costs for the coverage can be passed on to owners of the cargo for those who desire full replacement cargo coverage.

There are many reasons why a freight broker would need more specific forms of insurance coverage to successfully protect their business and position themselves to meet the needs of larger shipping clients. Here are a few types of policies to consider based on your company’s target clients and growth goals:

• Broad Form Contingent Cargo Insurance – This coverage is required when a freight broker assumes responsibility for lost cargo or damages that the motor carrier has not paid. It’s important insurance coverage and an extra level of protection for your shipping clients when a motor company’s coverage fails.
  
  Contingent cargo coverage may be available for FTL (Full Truck Load) shipments under most circumstances. However, some types of high-risk cargo — such as alcohol, tobacco, expensive electronics, cell phones, copper and other non-ferrous metals — require a broader form of cargo coverage.
• Professional Liability (Errors & Omissions) – Errors & Omissions responds to the legal liability for financial loss (not limited to the value of the cargo) incurred by a freight broker’s shipping client caused by the freight broker’s negligence, error or omission in the normal course of providing domestic freight broker services. This insurance provides additional peace of mind to shipping clients that their interests are protected.