Five Ways to reduce the risk of catastrophic losses
In the transportation industry, motor carriers face a myriad of risks that can lead to catastrophic...
Freight Brokers insurance provides your trucking business financial protection when you are acting as a freight agent for shippers.
As a freight broker, you are a vital link between the shipper and the trucking company. You facilitate the delivery of goods between the shipper and the motor carrier, managing all of the details from initial pickup to drop off to ensure your client’s cargo travels safely on each leg of its journey.
Not only do you streamline the process and remove obstacles to good service, but you also are your client’s advocate when things go wrong. If cargo is damaged during shipment, you work with your shipping partners to ensure issue resolution and payment, when necessary.
Unfortunately, your core role in the shipping process can make your trucking business vulnerable to lawsuits when things don’t go smoothly.
Typically, your brokerage assumes no responsibility for the property being transported. However, depending on how the brokerage is set up, a freight broker can be held liable for the negligent acts of a motor carrier or its truck drivers. If you provide driver equipment or are instrumental in controlling the delivery of goods, you can face additional risks.
That’s why it is important to have Freight Brokers Coverage. It protects you and your clients against incurring legal fees, court expenses, and judgments resulting from being named in a lawsuit against a motor carrier.
No two freight broker operations are the same. That’s why Great West provides several insurance endorsements to meet the unique needs of our brokers. An endorsement is simply an amendment to an insurance policy that modifies the coverage of the underlying policy. A Great West agent may recommend these endorsements based on how your brokerage is structured, your partnerships, and how you operate.
If you’re a freight broker that works with motor carriers, a Broadened Contingent Coverage Endorsement is a recommended addition to your insurance policy. Broadened Contingent Coverage protects your brokerage if your carrier has an accident and their Auto Liability and Cargo insurance are unable to pay for the damages or the settlement is not collectible.
As part of the Broadened Contingent Coverage Endorsement, you’re required to have a written agreement with your motor carrier, and they must furnish you with copies of their Auto Liability and Cargo policies, an Additional Insured Endorsement, or a certificate of insurance.
The limit of insurance payable through this endorsement is reduced by any payment made by, or on behalf of, the motor carrier.
A freight broker as an Additional Insured to your Auto Liability and Cargo insurance policies. Great West’s Additional Insured Endorsement helps you meet that requirement.
As a motor carrier, you need to have a written brokerage agreement in place that includes a “hold harmless agreement” with the freight broker.
This endorsement will then provide Primary Liability and Cargo coverage for you and the freight broker, including Contractual Liability and a provision for notice of policy cancellation or reduced limits.
The Broadened Contingent Liability coverage caps the coverage at the lesser of the amount shown in the policy and the amount required in the brokers agreement with the motor carrier. Sometimes a freight broker will require additional liability protection beyond what is specified in its contract with the hauling motor carrier.
For instance, the broker may carry $2 million of coverage in its own motor carrier operation but only requires $1 million in their brokers agreement with the hauling motor carrier and wants to have the same limits for both its broker and motor carrier operations. To achieve this, your agent will recommend adding a Second-Level Liability Endorsement to your Broadened Contingent Liability policy. This will provide the freight broker coverage over and above what is required by the contractual agreement with the hauling motor carrier.
It is important to note that this endorsement provides coverage only for freight brokers. The motor carrier is not insured through this policy.
At Great West, our sole focus has been on commercial truck insurance for more than 65 years. Our deep experience in the trucking industry and insuring trucking companies means we are uniquely knowledgeable about how to protect your freight broker business.
When you have an accident, we know that fast, efficient claims service is crucial to your livelihood and the clients that depend on you. That’s why Great West provides 24x7x365 proactive claims service specialists to help you file a claim and get things moving quickly.
Be sure to ask your Great West agent about:
This summary is intended for informational purposes only and does not replace or modify the definitions or information contained in any insurance policy or declaration page, which controls all coverage determinations. Terms and conditions may vary by state, and exclusions may apply.
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