Freight Broker Insurance

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Freight Broker Insurance

October 2, 2018

Freight Broker Insurance

Before deciding on changing your current coverage or insuring your business, we strongly advise that you discuss it with your insurance agent, attorney, or accountant. Having said that, below are some do’s and don’ts that apply to the major products in freight broker insurance:


When it comes to freight broker insurance, do consider these coverage options:

– Property and general liability

Consider buying property insurance if you own or lease property. It is advisable that you package it with general or freight broker liability insurance for your operations and premises. Your agent should advise you on recommendations for coverage and quotes.

– Vicarious auto liability

As a freight broker, you also need this type of insurance. Your insurer will be in a better position to defend you in case you are sued. The vicarious auto liability will cover you if you are found liable. But before you sign a contract with the insurer, make sure that you carefully review the terms and condition. This is because the policies offered for freight broker liability and vicarious auto liability vary widely. Also, consider buying an umbrella policy. This policy will allow you to increase your liability limits. This is very important for a freight broker.

Workers’ compensation

Another product you should consider getting for freight broker insurance is workers’ compensation. Every state requires that if you have two or more employees, you should cover them with this product. Also, ensure that the carrier you are doing business with has this insurance cover. This type of freight broker liability insurance will cover you in case you are sued for injury to your employees as he or she was on duty.

– Contingent cargo

This is another type of freight broker insurance that you should consider getting. This product is important because you do not know what your carrier’s policy covers and does not cover. Do remember that contingent cargo insurance is not all the same. Make sure you read and understand the terms and conditions of the cover before signing a contract with the insurer.

– Errors and omissions

Be advised that some claims are not covered under other policy. For instance, if your carrier gives you wrong information by mistake, the misinformation could be considered as negligence. In this case, you can file a claim and it will be covered by errors and omissions (E&O) insurance. Remember that E&O will not pay for property damage or bodily injury. However, in some circumstances, such as if error and omissions insurance is part of your contingent cargo policy, damage to cargo may be covered. Therefore, consider getting this product for your freight broker insurance.


Below are some products that you should not waste your time and money on:

– Excess auto liability

To bridge the gap between the shipper’s requirement and the carrier’s limits, freight brokers buy auto liability coverage. We advise against doing this. Do not buy insurance for the benefit of another party. You should only insure your liability exposure. Therefore, do not waste your time and money on this type of freight broker liability insurance.

Named as additional insured

Your carrier can name you as an additional insured. In this case, out of four carrier policies, you can be named as an additional insured in one policy. Here they are:

– Auto liability

You do not have to be an additional insured in this policy. This is because the omnibus insuring agreement and MCS-90 endorsement automatically include the shipper and the broker as insured. Therefore, no need for this type of freight broker liability insurance.

– General liability

You can bename as an additional insured in this type of carrier policy.

– Cargo insurance

This is a policy that you should not waste time and money on. You cargo is obviously covered by the shipper’s policy when in transit, so no need for you taking this policy.

– Workers’ compensation

It is not legal in most states for a company to be an additional insured in another company’s policy.

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