The Important Details of Insuring Cargo Trucks

Transportation insurance, especially motor truck cargo insurance, is not an area that an insurance agent should jump into without a certain level of expertise. Trucking auto liability insurance is significantly different than standard auto insurance, and thus requires a more experienced agent. There are a number of nuances when it comes to insuring a freight truck, and agents need to be careful that they don’t offer incorrect information or advice that could put their clients in a risky financial situation in the future and be a huge professional liability for the agent.

Motor truck cargo insurance provides liability protection for drivers while they are transporting the property of others. This type of policy protects both the insured (driver) and the covered property (cargo) from financial loss if cargo items become damaged or lost due to a covered peril. While there is no legal requirement for obtaining cargo insurance, many truckers and trucking companies seek out coverage to reduce their risk of financial loss.

The Varying Types of Cargo Insurance

Land cargo insurance may be used for intrastate or interstate transportation. Because of the varying cargo standards and regulations among different states, land cargo coverage is often difficult to standardize. Because of this, they are varying types of cargo policies that agents may be able to offer to their clients.

  • Motor Truck Cargo: Motor truck cargo policies vary greatly between insurance companies, usually based on region. Motor truck cargo insurance is not available for all types of commodities, and usually comes with exclusions for items such an as jewelry, money, animals, tobacco, alcohol or explosives. Certain target commodities like electronics and apparel may be excluded or only partially covered, depending on the wholesaler.
  • Contingent Cargo: A contingent cargo policy covers common causes of loss, such as damage and theft in transit, on any type of common carrier. This type of policy is usually pretty standard among insurance companies as it offers very broad coverage.

Cargo Insurance Add-Ons

  • Earned Freight: This type of coverage replaces income lost when a load cannot be delivered due to a covered cargo loss. For smaller companies and independent drivers, this type of add-on is crucial to ensuring that a loss of cargo does not financially damage the business.
  • Refrigeration Breakdown: Covers cargo losses that are caused by malfunctioning temperature control units. This type of coverage is crucial for shipping perishable goods.
  • Loading and Unloading Coverage: If the shipping company handles the loading and unloading of goods, they may be liable for damage that occurs during the process. The type of policy covers accidental breakage of cargo during the loading and unloading process.

Transportation expertise is crucial when insuring motor truck cargo. Agents, even if they are somewhat familiar with transportation coverage, can greatly benefit from having an experienced transportation wholesaler behind them. A wholesaler with a designated transportation department can provide agents with the knowledge, experience and product portfolio that they may not otherwise have access to.

About American Team Managers Insurance Services

Founded in 1998 by Chris C. Michaels, American Team Managers Insurance Services (ATM) has provided wholesale and MGA services to more than 5,000 independent insurance agents throughout the United States. Our goal is to establish close, long-term relationships with our agency partners and insurance carriers and provide competitive products for the Exclusive and Non-Exclusive markets that we serve. For more information on our products and services, give us a call at (714) 414-1200 to speak to a representative.