Auto Liability Coverages:

Various types of coverages are available to address Auto Liability on behalf of freight brokers. It is of utmost importance that Freight Brokers have sufficient coverage and a clear understanding of how their policy responds to specific contractual language agreed upon with a shipper or motor carrier.

Contingent Auto Liability:

Contingent Auto Liability insurance is designed to cover the liability of a freight broker on a contingent basis. In this scenario, the motor carrier's insurance serves as the primary coverage, and the contingent auto liability comes into play when the motor carrier's policy does not cover a valid claim or if the motor carrier's insurer becomes insolvent (within the policy terms). There might be additional conditions that must be met for the coverage to take effect. Policies can be written with aggregate or per occurrence limits. Whether defense expenses are covered depends on the policy form and whether it is included within or outside of the policy limits. If the trucking company provides defense, there might be no separate defense coverage under the contingent auto liability policy. It is crucial to thoroughly understand the policy details and ask questions before finalizing coverage. Punitive and exemplary damages are typically not covered. Coverage limits for contingent auto liability are commonly set between $15 million and $25 million before considering additional limits from an excess market.

Truck Broker or Third-Party Liability Insurance:

Truck Broker Liability insurance provides broader coverage than Contingent Auto Liability. It may also be referred to as Third-Party Liability insurance, which is similar in nature. This coverage applies to bodily injury and/or property damage arising from the freight broker's operations as a transportation property broker. In some cases, this policy can be bundled with General Liability coverage. It's essential to note that this coverage is intended solely for the freight brokerage and does not act as excess coverage over the motor carrier or cover the shipper in any capacity. Each policy can differ, so it's critical to understand how a specific policy will respond to contractual language or agreements with motor carriers and shippers. Truck Broker Liability insurance can be written on a per occurrence or aggregate basis, but per occurrence is more common. Defense coverage may be included within or outside of the limit, and it will only respond if the freight brokerage is found liable. The policy does not assume responsibility for the motor carrier's or shipper's actions; its sole purpose is to cover the freight broker. Punitive and exemplary damages may be excluded, either entirely or on a state-to-state basis, depending on the policy's coverage. Coverage limits for Truck Broker Liability insurance are typically available in the range of $1 million to $5 million before considering additional limits from an excess market.

Primary Auto Liability for Freight Brokers:

There are a limited number of carriers in the market that offer Primary Auto Liability coverage for freight brokers. These policies often provide extensive coverage but can be costly. They usually offer lower limits, necessitating the purchase of excess coverage if higher limits are desired by the broker.