In today’s challenging environment where carriers are struggling to turn a profit due to low rates, it becomes crucial to implement cost-cutting measures. However, not all costs should be slashed, especially when it comes to insurance. Insurance plays a vital role in protecting motor carriers and freight brokers from massive financial losses.
Jessie Merritt, the Executive Vice President of Sales at Reliance Partners, emphasized the importance of understanding insurance coverage in a recent episode of WHAT THE Truck?!? He highlighted that getting claims paid promptly is essential for scaling and growing a trucking company or freight brokerage. It is crucial to know what is covered under the current policy to avoid any surprises in the event of a claim.
For example, most motor carrier policies include a towing supplement under physical damage coverage. This supplement typically covers a limited amount for tow truck services, which may not be sufficient in certain situations. It is important to ensure proper coverage to avoid significant losses in case of an accident.
While carriers usually have a better understanding of their insurance coverage compared to freight brokers, the trend is shifting. More freight brokers are now opting to carry their own insurance to supplement the carrier’s coverage.
Merritt also outlined the three most common insurance policies for brokers: contingent cargo, cargo legal liability, and shipper’s interest. It is essential to know the coverage and common exclusions of each policy to make informed decisions.
In cases of theft or loss, cooperation with local authorities is crucial, despite the overwhelming volume of claims and thefts. Carriers and brokers should have all necessary information ready for a police report and act promptly if stolen or lost cargo is recovered.
To mitigate costs, motor carriers can consider options like taking on a deductible or retention, reviewing insurance policies for competitive rates, and maintaining a good safety record. Safety scores and inspection results play a significant role in determining insurance premiums and claim history.
With the rise of cargo theft, having sustainable insurance coverage is more important than ever for brokers and carriers. Insurance companies are feeling the impact of increased theft incidents, prompting some to consider restricting coverage over time.
Overall, understanding insurance coverage, cooperating with authorities in case of theft or loss, and implementing cost-saving measures can help carriers and brokers navigate the challenging landscape of the transportation industry. Interested readers can learn more about Reliance Partners by visiting their website.
