Freight Broker Insurance Requirements
The responsibilities of a freight broker and freight forwarder are quite different, and brokers are rarely liable for the loss or damage of cargo during transit. This is the responsibility of the freight forwarder. Brokers still need to protect themselves from various risks associated with the nature of their business and should be aware of the minimum freight broker insurance requirements. With so many insurance products on the market, here is a look at some of the important and not-so-important coverage options for freight brokers.
Essential Coverage Options For Freight Broker Insurance Requirements
- Property or General liability insurance
If you lease or own property, you should consider getting property insurance, in conjunction with general liability insurance for your business premises and operations.
- Vicarious auto liability
This is an important coverage option for brokers in the event that you’re named in a lawsuit, perhaps due to negligent hiring that leads to the loss or damage of cargo. The vicarious auto liability will cover you if you’re found liable. But make sure it’s broad enough to cover the type/size of cargo you specialize in.
- Contingent cargo
Generally, you’re not legally liable for the loss or damage of cargo during transit. But since you don’t know the extent of the carrier’s or freight forwarder’s policies, you can purchase contingent cargo insurance to fill any gaps. Make sure that the basis of the coverage is not strictly “legal liability”.
- Workers’ compensation
Any business with an employee is required by law to obtain workers’ compensation, including brokers. Otherwise, ensure that the businesses you work with, such as trucking companies, have workers’ comp for their drivers and other employees. If the carrier is operating in a state where workers’ comp is not mandatory, they should inform you with a written statement so you can protect yourself adequately.
- Errors and Omissions
This cover is intended for claims that don’t involve property damage or bodily injury, and are not included under any other policy. For instance, a broker may be considered negligent for giving the wrong information to a carrier, even by mistake.
When it comes to buying insurance, it helps to have access to a professional who can guide you through the process, from reviewing coverage recommendations to analyzing quotes. Consider working with an insurance broker for the best freight broker coverage options and rates in your area.
Get a Freight Broker Insurance Quote
At Brookhurst Insurance, our agents are experienced in freight broker insurance products. We would be happy to discuss customized plans for your freight brokerage business to be insured properly. This can give you some peace of mind to run normal day-to-day operations without the need to worry about accidents beyond your control. Request a quote online or call 818.465.7860 to speak with a freight broker insurance agent today!