Insurance in the trucking industry has been a prominent topic, often focusing on motor carriers and truck drivers rather than freight brokers. However, recent cases have brought broker liability into the spotlight, with the Supreme Court taking notice of the gray areas. Brokers and 3PLs are frequently held accountable for lost or damaged cargo, and in some instances, this responsibility extends to bodily injury and death.
Given this ambiguous landscape, it is crucial for 3PLs to fully comprehend their cargo insurance coverage, as gaps and restrictions can lead to unpleasant surprises when filing claims. Common restrictions involve reefer breakdown and theft, which can pose significant financial challenges for brokers and 3PLs.
To avoid surprises, brokers should carefully review their insurance quotes, paying close attention to any endorsements that may restrict coverage. Endorsements can limit coverage as well as expand it, so it is essential to clarify any restrictions with the insurance agent.
Understanding the type of insurance coverage purchased is also vital. While contingent coverage is common among 3PL insurance products, it can create delays and bottlenecks as it only kicks in after the trucking company’s insurance provider denies the claim. Primary cargo insurance may be a more attractive option for brokers seeking immediate reimbursement for shippers.
Brokers can choose from a variety of insurance products to enhance security in their operations. Merritt advises against overlooking other areas of liability, such as cybersecurity and directors and officers coverage. Updating insurance products can benefit many brokers, and Reliance Partners can assist in understanding coverage options.
For more information on Reliance Partners and their services, visit their website.
