Trucking brokers have begun to protect themselves from non covered cargo losses by purchasing contingent cargo insurance. The policy provides the trucking broker with coverage for the cargo being hauled in the event that the trucker’s policy has been cancelled not paid, or that the company has gone out of business.
The trucking broker has the ultimate responsibility for the cargo that is being hauled by their contracted truckers. Historically trucking brokers have relied upon certificates of coverage provided by the contracted broker to ensure that there is adequate coverage in place to protect the cargo being hauled. Many times the trucking broker would be unaware that a policy has cancelled midterm for non-payment of premium.
When trucking brokers contract the hauling of cargo to a contract carrier and the carrier is involved in a loss involving cargo being hauled, the trucking broker will be responsible to pay for the loss of cargo even if the contract carrier’s policy has been cancelled. Contingent cargo insurance provides the added protection to the broker as an extra precaution to ensure that they are not left in a position that they need to cover tens of thousands of dollars out of their own pocket for damaged cargo.
Trucking brokers with contingent cargo coverage will still be required to verify that the contract carrier has a cargo policy in place with enough coverage to protect the cargo being hauled. Contingent cargo coverage is designed to act as a secondary coverage to protect the cargo in a situation that the broker has taken all necessary actions to ensure that the contract carrier has coverage and is unaware of a lapse in coverage. This added protection can help trucking brokers protect their businesses and avoid having to pay out personally out of pocket due to a lapse in coverage on the part of the contracted carrier.