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Table Of Contents
Learn About Cargo Insurance? ↴
What Is Cargo Insurance? ↴
Who Is Cargo Insurance For? ↴
What are the benefits? ↴
When Do You Need Cargo Insurance? ↴
Coverage Options & Limits ↴
What Doesn't It Cover ↴
Wrapping Up The Key Points ↴
Learning The Basics Of Cargo Insurance Coverage For Truckers
Cargo insurance is a type of insurance that provides coverage for goods that are being transported from location to location. Having a cargo insurance policy can protect the trucker and shipper from a number of risks, including loss or damage to the goods.
When choosing a cargo policy, it is important to understand the different types of coverage available. Some policies will only provide basic protection, while others will offer more comprehensive coverage. It is also important to be aware of any exclusions that may apply to your policy.
In order for cargo insurance to be effective, it is important to have a clear understanding of the coverage that is being provided. This article will provide everything you need to know about cargo insurance and the different types of coverage available.
What Is Cargo Insurance?
Cargo insurance for truckers is a policy that provides coverage for the loss or damage of goods being transported. This type of policy can be very important for truckers, as it can help protect them from costly losses in the event of an accident or other incident. Having insurance protection can provide financial loss risk management in the event of an issue during shipment.
Who Needs Cargo Insurance?
Every business transporting goods in one way or another should obtain cargo insurance. In most industries, it is a requirement to operate with the shippers. Shippers and carriers won't work with you if you have inefficient limits or no coverage at all. Therefore, any business that is transporting goods on land, ocean, or air should reach out to an insurance agent to understand their unique needs and get coverage for the cargo.
Trucking Operations: As a trucker, you are responsible for driving other businesses' cargo from one location to the next daily. You have a big responsibility and play a huge role in the important supply chain. In the event of an accident, theft, or other accident, you could be found liable for the cargo inside. When this happens and you have a cargo insurance policy, you should be covered from the full limit as long as the accident is covered on the policy.
Freight Brokers: Will require a different set of cargo insurance from the original trucker. A freight broker is not responsible for driving the cargo, nor loading/unloading. A freight broker is responsible for setting up shipments, so if there were a loss during part of the freight broker's responsibilities, then they can be found liable for the cargo loss. This is why it's important to have contingent cargo insurance as a freight broker to protect yourself in the event the liability falls on you.
Benefits Of Cargo Insurance
Provide financial protection in the event of a loss due to any of the following:
- Protect your cargo if lost
- Long delays for cargo
- If it is stolen
- The accident makes the cargo unusable
When Do You Need It?
Cargo insurance is typically required when you begin transportation. It's typically a prerequisite to getting shipping appointments to begin hauling. You will want to obtain cargo insurance when you get your auto liability policy. Having everything under one policy makes managing insurance easy.
If you were not able to obtain it with your liability policy or the limits have increased, there are companies like Tego Insurance which provides monoline cargo insurance policies. This is where we don't group the policy under any other coverages and can provide a single cargo insurance coverage on a limited number of vehicles.
Learn About The Coverage Options
Limits: For truckers that haul general freight, most shippers will require a minimum of $100,000 limit. While this is not the requirement by the FMCSA itself, it is a requirement from shippers so that their cargo is protected at all times. In some cases, you may be required to have more and in the event, you are hauling more pricy cargo.
It's important to understand that the limit is the maximum the insurance company will provide in the event of a loss.
That means if you are hauling $150,000 worth of cargo and only have a $100,000 limit, then the insurer will pay out $100,000. Having the right coverage limit and understanding what you will be hauling is very important in operating a successful transportation business.
Land Coverage: Truckers and other land vehicles that are typically transporting goods within the country.
Marine Coverage: Coverage for your goods is typically on the ocean for international transportation.
There are a number of factors that go into determining the cost of cargo insurance, including the value of the goods being shipped and the operating radius.
Is There Anything It Doesn't Cover?
Yes, there are items and situations where your cargo is not covered. Sometimes, even when you have a policy, the goods will not be covered.
This can happen for a variety of reasons which include faulty packaging or having a non-scheduled driver transporting the shipment.
In the event that the packaging for the cargo is poor resulting in unusable items, then the insurance company is not obligated to pay out for the loss. The liability would fall with either the shipper or the packaging company.
Think of anything that isn't covered as an overlooked or system procedure flaw.
For example, if a non-scheduled driver drove 10 miles to drop off a shipment because the other driver called in sick, and in the midst of driving got into an accident, the cargo would more than likely not be covered due to the driver not being scheduled on the cargo insurance policy.
The insuring policy will have a full list of perils (AKA risks) which can be reviewed to understand when you are and are not covered. Another way that your cargo could not be covered in the event of a loss if it is was in a unique situation that was not established on the policy. To best understand the full outline of your policy it's important to discuss your questions with a trusted insurance advisor.
Conclusion
Cargo insurance is a requirement for almost all shippers and the limit may vary per operation and type of cargo your hauling. The price also varies per a lot of factors, but you can look into paying as low as $300 per truck to $3,500 or more if the limit is higher. A cargo insurance policy can be obtained easily by reaching out to a truck insurance agency like Tego Insurance. We can get you the coverage you need quickly at the best price! Your needs are unique and it's important to be covered for every important risk so that you are properly insured while traveling safely on and off the road.
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To ensure the highest degree of accuracy, all posts go through a strict editorial process and are reviewed by a licensed insurance agent.