Motor Truck Cargo Carriers Coverage Form

Motor truck cargo liability coverage is a form of transportation insurance that covers the physical damage of goods while they are in transit. It is typically purchased to supplement auto liability insurance for trucks.

Cargo liability policies cover for-hire trucking risks on vehicles including box trucks, dump trucks, tractor trailers, flatbeds and car haulers. This type of insurance is often based on contracts rather than regulatory trucking language and is negotiated with each shipper.

Coverage

Motor truck cargo insurance provides liability protection for freight transport companies. It is a separate coverage form that typically provides a lower deductible than general auto liability. This makes it ideal for companies that carry expensive or valuable property, such as shipping fleets. The policy also typically provides coverage for hired and non-owned trailers attached to the insured truck.

A number of risks can damage or destroy cargo while it is in transit. These include vehicle collisions, overturns, fire and theft. In addition to the obvious financial costs of replacing or repairing damaged goods, companies can suffer reputational harm and lose clients. This can impact revenue for a company long after the loss of a shipment. Motor truck cargo insurance can help cover these costs and protect the company’s reputation.

In some cases, companies may be required to carry this insurance by their shippers. In other cases, it is a good business decision because of the high cost of repairing and replacing expensive cargo. In addition, some trucking companies are at risk of losing their business if they experience large liability claims.

The type of cargo transported also affects the cost of motor truck cargo insurance. For example, hauling aggregate or sand, gravel or dirt can have different risks from hauling construction materials, scrap metal and recycled products. Other common risks include weather-related events, such as hail and slippery roads. Cargo claims are typically more costly than standard auto liability claims, and may require the company to invest in a new truck or trailer.

A key difference between the Truckers and Motor Cargo forms is who is named as an insured. The Truckers form includes only those entities that are regulated as transportation providers, while the Motor Cargo form extends coverage to contractors. Both types of coverages allow the insured to add or remove parties from their list of insureds. This is particularly helpful if the insured works with multiple groups, including private or commercial insurers and brokers.

Unlike general auto liability policies, which cover only those people the insured injures while driving, motor truck cargo coverage extends to everyone who owns or operates the vehicles. This includes employees, family members, and others that may be on the job when an accident occurs. The policy can also be extended to include additional property and legal liability.

Exclusions

Cargo insurance for truckers is a vital piece of coverage. It protects a freight carrier against losses to the property they transport for clients, and most shipping companies require that a trucking company carry this type of policy before entrusting them with their cargo. However, like any other insurance policy, the motor truck cargo carriers coverage form contains exclusions that must be reviewed carefully. It is important that truckers and their brokers take the time to understand all of the policy’s terms, as one misunderstand can lead to a loss that could have been avoided.

There are several types of cargo policies available, with varying limits and deductibles. For example, some policies have an overall limit of $300,000 with a $5,000 deductible, while others may offer higher limits and lower deductibles for specific types of property or perils. This allows a trucking company to tailor their policy to their particular transportation exposures.

Many of the same property exclusions that are found in a standard liability policy also exist within the cargo policy. These include a prohibition on coverage for the theft of certain types of property, such as electronics or high-valued goods. There is also a limitation on coverage for property that has been transported without the proper bills of lading, or property that has been loaded and unloaded into or from any vehicle other than a covered truck, trailer, or semi-trailer.

The most common cause of property loss excluded from a standard cargo policy is fire or other physical damage to the covered load during the loading, transportation, and unloading process. This is typically not a problem for truckers who haul general freight, but it is an issue for those who transport highly valuable or hazardous property.

Another common exclusion is the prohibition on coverage for any loss caused by employee dishonesty. If a trucker or their broker hires someone to help with loading, unloading, or transporting cargo, there is a high likelihood that this person will have access to the cargo. If the trucker or their broker is in the business of delivering retail goods or other expensive items, there is an even higher risk that a dishonest employee will steal some of the cargo. A separate crime policy might be required in order to address this type of risk, and is something that any trucker should review carefully before hiring a third party to assist in the transport of their valuable cargo.

Sublimits

In most instances, shippers demand cargo insurance for any transporter that handles their freight. This is often established through contract or bill of lading disclosure. The carrier may also be required to carry minimum cargo liability limits by the federal government. The cargo policy can, and usually is, tailored to the specific operations and exposures of the carrier. Limits vary between insurers, with some offering lower overall limits with higher deductibles for certain types of cargo or perils.

For example, some policies might have a much lower limit for claims involving electronics or jewelry. This is because these cargo items are more prone to loss or theft, and the insurers want to limit the amount that they will have to pay out in the event of a claim. There are also often lower sublimits for losses resulting from fire or explosion, as these are less preventable risks.

Most policies also offer coverage for the legal liability of the carrier for the property being transported. This is important because the carrier could be held liable for a breach of contract or other wrongful acts while handling the cargo. Cargo policies typically include a liability limit of up to $1 million.

Contingent cargo coverage is another option for trucking companies that provides additional liability protection for their customers’ goods in the event of a loss or damage. The policy can be purchased on top of the motor truck cargo policy and can help protect freight brokers who arrange for transportation services against cargo damage claims from for-hire carriers, peril exclusions, commodity exclusions, lapses in the carrier’s insurance, and other issues.

As with other classes of commercial insurance, it is crucial for agents to understand the ins and outs of this class before quoting. It is often helpful to partner with a wholesaler with an experienced transportation department or an agency that specializes in this coverage. This way, the agent will be able to explain all of the caveats and limitations of the policy to their clients. This will help to avoid any errors and omissions that could result in a denied claim in the future.

Coinsurance

Motor truck cargo liability insurance provides protection for for-hire freight haulers in vehicles such as box trucks, flatbeds and tractor-trailers. It can be purchased to cover a specific shipment or a series of shipments over the life of the policy. The cost of the policy varies from insurer to insurer, and coverage limits and deductibles can vary as well.

Generally, the motor truck cargo liability policy covers risks such as fire damage, collision and overturn, theft, water damage and equipment failure. Some policies also include charges for removing debris and pollutants, preventing further loss of cargo and legal defense costs. Some of these policies can also cover additional fees for the transporter to take certain actions with their clients’ goods, such as storing them at a facility until they can be delivered.

The value of the property that is carried by a client can have a significant impact on the amount of coverage required by a cargo carrier. The transporter must agree with the client on a mutually agreed value for the cargo, which will then be reflected in the transportation contract and the cargo policy. In addition, some cargo policies have a coinsurance clause that will require the transporter to provide a minimum of the amount of insurance required for each occurrence of loss.

As with other types of inland marine insurance, the cost of the policy varies based on the value of the property being transported and the distances it is going to be carried over. Many companies will require that their transporters carry this type of insurance in order to continue doing business with them.

For transporters, a large claim can have a serious negative impact on the profitability of a company, and this is especially true when it comes to cargo claims. A single accident with destroyed or lost goods can damage a company’s reputation, and it could take years to recover from this sort of financial setback. This is why it is important that motor truck cargo insurance policies are properly structured to meet the needs of each transporter.