What is Contingent Cargo Insurance?

Contingent cargo insurance serves as coverage for freight brokers, addressing complex claims between shippers and carriers. It comes into play when a general cargo insurance claim fails to function as intended or is declined.

The Main Functions :

In regular cargo insurance, the shipper is protected if the cargo is lost or damaged while in the carrier's possession. However, in contingent cargo cases, the freight broker becomes involved. If the carrier refuses or is unable to pay for the cargo losses, the freight broker might be held accountable. Contingent cargo insurance steps in to financially protect the freight broker in such situations.

For freight brokers, carrying contingent cargo insurance is crucial for several reasons. Firstly, it establishes a positive reputation in the market, as businesses prefer to work with brokers who prioritize their interests and can handle contingencies effectively. Secondly, carriers also expect freight brokers to have this coverage, and not having it may hinder the broker's ability to find carriers willing to work with them.

While contingent cargo insurance is a niche product, it remains essential for freight brokers who facilitate relationships between shippers and carriers. It safeguards them from potential financial losses resulting from carrier payment defaults. While there are no legal obligations to carry it, market-driven expectations make it a vital component of freight broker operations.

In summary, contingent cargo insurance offers protection to freight brokers, addressing potential disputes and financial liabilities arising from cargo damages. For freight brokers seeking to build prosperous relationships, having this coverage is non-negotiable.