Business isn’t all just about finding customers. Getting products from point A to point B quickly and securely is also vital. When products don’t arrive on time, business operations get interrupted. Also, sales might decrease because customers fail to avail the goods needed. Freight brokers exist to solve such problems.
Working with shipping companies isn’t easy if you’re running a successful Amazon store or any other business where you’ll have to ship large volumes of goods. First, you’ll have to search for a reputable company with a good history of providing fair and efficient shipping services. When you’ve found one, you’ll then have to negotiate to ensure that you’re not paying more than what’s needed for the shipment. After the shipping company agrees to work with you, the next step is to plan a route. Finally, you’ll have to track your cargo as soon as the shipping company proceeds to deliver it.
Shipping takes time, and freight brokers are paid to do all of the above tasks. An estimated 18,000 licensed freight brokers are in the United States , so you won’t run out of options. Still, it’s best to work with a freight broker having freight broker cargo insurance.
A freight broker acts as a middleman between clients and shipping companies. The work involves finding a shipping company, negotiating, preparing the goods for shipment, and tracking the goods so that the cargo doesn't get damaged or lost and arrives on time.
A shipping company has a freight cargo insurance policy, which protects you from significant loss by providing reimbursement equal to the total value of your shipment if your cargo gets lost or damaged. Here’s an example for you to understand:
“Your freight broker arranged your shipment amounting to $1 million with company A. Company A’s ship encountered a severe storm while on transit. They have to jettison some cargo, including yours, to make it through. Because of this, the company must reimburse you for the loss. And to do this, it ran its freight cargo insurance policy to hand you money equal to the total amount of your lost goods”.
But sometimes, a carrier won’t grant the shipping company’s request to use its insurance coverage. As a result, you might not get reimbursement for the damage done even if you file a claim. Still, this doesn’t have to be the case if your freight broker has contingent cargo insurance for freight brokers.
Contingent cargo insurance takes into effect when a shipping company won’t pay for your claim. What it does is put the responsibility of paying for damages on the shoulders of the freight broker you’re working with.
In other words, if you’re a freight broker, contingent cargo coverage will take care of things when the shipping company that you’ve chosen for a client refuses to pay for the damages. Thus, ensuring that there will be no major loss for your client and that your professional record remains untarnished.
We’re sure you're asking how long it will take for contingent cargo insurance to apply or take effect for lost or damaged cargo during shipment. The answer for this is that it won’t pay immediately. A general rule is that a shipping company’s carrier must deny the application to use coverage before a freight broker’s contingent cargo insurance kicks in. If you don’t want to wait, coordinate with your freight broker to confirm if there’s a primary cargo insurance policy availed because, unlike contingent insurance policy, a primary cargo insurance policy can be used immediately
In addition, you can’t file a claim against your freight broker’s contingent insurance policy if there’s no binding agreement. And so, ensure that there’s a contract requiring the freight broker to pay in case the shipping company can’t pay for your lost goods using its insurance policy.
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Let’s say you’re working as a freight broker, and you’re asking if contingent cargo insurance is enough. The answer to your question is no. Aside from that one insurance, you also need other policies such as general liability insurance.
Let’s say the client’s shipment arrived as promised. However, it turned out that the goods were damaged. But instead of the shipping company, a claim is filed against you. In this case, general liability insurance will be very useful as it will account for all the costs needed to settle the client’s claim for damaged goods.
Another case, where general liability insurance applies is when the client sustains injuries at the workplace. Like, say for example, while the client is in your office and he or she gets bitten by your office's dog or trips on objects you didn't arrange neatly.
By the way, don’t you want to know how contingent cargo insurance and general liability differ? General liability insurance only applies to property damage and bodily injuries. On the other hand, contingent cargo insurance accounts only for the loss of goods due to the actions of the shipping carrier.
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Contingent cargo insurance cost is as affordable as other specialized insurance policies. Contingent cargo insurance for freight brokers cost $1,500 a year on average. On the other hand, availing of liability policies (general liability insurance policy, for example) adds another $400. If we add these figures, the total contingent cargo insurance price is $1,900 annually. Take a look at the table below to know the rates of the best carriers.
|Company||Cost per month||Cost per year||Best for|
|Thimble||$108.33||$1,299.96||Small-time freight brokers|
|Chubb||$125.00||$1,500.00||Freight brokers having clients not only in the United States but also in other parts of the globe|
|State Farm||$140.00||$1,680.00||Contingent cargo insurance for freight brokerage firms|
|Mapfre||$161.00||$1,932.00||Freight brokers in the United States planning to extend services in the Philippines and Puerto Rico|
|AmWins||$175||$2,100.00||Comprehensive contingent cargo insurance|
|TransInsurers||$134||$1,608.00||Freight brokers who focus on shipping goods by land|
Thimble is widely known for providing insurance to small businesses and artisans. And so, it’s great that the company offers contingent insurance for freight brokers at an affordable price.
Thimble isn’t rated by AM Best. Still, the company has a good reputation since it’s backed by Markel that has a rating of A-. Consider getting insurance from this company because premiums are affordable, and filing a claim is very easy.
Thimble’s contingent cargo insurance is very straightforward. After providing all the details, the company will then proceed to process your application. If approved, you’ll enjoy up to $1 million to$2 million coverage which is already enough, provided that you only work with small businesses.
Online insurance application
Only tailored to small-time freight brokers
Best for : Small-time freight brokers
Average cost: $108.33
Our rating : 8/10
AM Best rates Chubb with an A++ rating. This company is known for its insurance policies that tailor to the needs of businesses operating internationally. The top insurance policies Chubb offers are auto and home insurance. Still, it has contingent coverage that’s part of its ocean cargo insurance.
Chubb’s contingent cargo insurance comes as an additional option to its worldwide ocean cargo insurance, which costs $1,500 maximum and provides up to a $60 million coverage limit. Benefits you’ll enjoy if you choose Chubb for your contingent cargo insurance are broad protection to goods in transit, fast and flexible claims process, streamlined billing and transparent accounting, an online certificate of insurance, and more.
$60 million coverage limit
Provides numerous benefits
Not rated by Better Business Bureau
Best for : Freight brokers having clients not only in the United States but also in other parts of the globe
Average cost: $125 per month
Our rating : 10/10
State Farm offers insurance policies that are cheaper than the average pricing in the market. And so, we didn’t dare to exclude it from the best contingent cargo insurance companies. AM Best is a trustworthy company as it’s rated A++ by AM Best and AA by S&P.
You might avail of contingent cargo insurance from State Farm if you talk with an agent about the specifics of State Farm distributor insurance, which provides property, business liability, client property, employee, and equipment coverage.
Rated by AM Best and S&P
It doesn’t provide online quotes
Best for : Contingent cargo insurance for freight brokerage firms
Average cost: $140 per month
Our rating : 10/10
Mapfre is an insurance company providing policies in the US and other countries such as the Philippines and Puerto Rico. If you plan to start a freight brokerage service in these two countries, we highly recommend you to try Mapfre, as its cargo insurance policies provide for the needs of freight brokers.
Mapfre Puerto Rico offers contingent cargo insurance as part of its ocean marine and inland marine insurance. Benefits that you’ll enjoy include but are not limited to specialized service and loss control programs that will help to determine how much you’ve lost depending on the mode of transport, type of products, and the way they’re stored.
On the other hand, Mapfre Philippines offers contingent cargo insurance with its marine cargo insurance, providing coverage while cargo is being transported by land or sea.
Insurance coverage that tailors to the needs of freight brokers
Established insurer and operates in different countries
Contingency coverage might only be offered by Mapfre Philippines and Mapfre Puerto Rico
Best for : Freight brokers in the United States planning to extend services in the Philippines and Puerto Rico
Average cost: $161 per month
Our rating : 10/10
We’re not very familiar with Amwins. But from our search, many say that it’s a decent insurance company providing great deals, especially when it comes to its contingency insurance for freight brokers. As of now, AmWins doesn’t have a rating from BBB or AM Best.
AmWins contingent cargo insurance comes in the form of freight broker’s liability and contingent coverage. The base coverage is $5 million. Also, additional options provide $100,000 up to $1 million coverage for professional liability insurance, general liability insurance, and freight broker’s auto insurance.
$5 million coverage
Has liability policies as add-ons
Not rated by AM Best and BBB
Requires specific documents before approving your insurance application
Best for : Comprehensive contingent cargo insurance
Average cost: $175 per month
Our rating : 6/10
Transinsurers is an insurance company specializing in broker insurance, freight insurance, and trucking insurance. Just like the previous insurance company, this carrier isn’t rated by BBB, AM Best, or S&P. Still, we included this one in our list to provide you with a comprehensive list of options.
Trans Insurers’ contingent cargo insurance is part of its freight brokers insurance policy that combines truck broker liability, contingent auto liability, and general liability coverage.
Offers truck broker liability and general liability together with contingent cargo insurance
Not rated by reputable organizations overseeing insurance companies
Quotes aren’t transparent
Best for : Freight brokers who focus on shipping goods by land
Average cost: $134 per month
Our rating : 10/10
If you're a freight broker, you need insurance so that you don't end up using your own money to pay for claims made by clients when their shipment gets lost or damaged.
In addition, most clients won’t work with you if you don’t protect them from risks. Therefore, aside from the one above, another reason why freight brokers need contingent cargo insurance is to provide clients with the assurance that significant losses won’t happen even if shipping goes haywire.
We’ve said this before but will repeat it just in case you missed it. As a client, get a contract that will demand the freight broker to pay if the shipping company won’t cover your losses. Always put in mind that a freight broker can easily refuse to provide coverage using contingent cargo insurance if there’s no binding agreement.
That’s the end of our discussion about freight broker cargo insurance today. Before going, we suggest you click the get “Get Quotes” to get the cheapest and most practical contingent cargo insurance quotes online!
Lonnie Bell Insuranker
Policy Type: Business Insurance
Company name: Employers Insurance
Use anyone except Employers. Period. They are non-transparent and shameful. After I complained long enough to warrant a call from a supervisor, the supervisor called back from a PRIVATE NUMBER (no caller ID), left a message that they are not reversing their decision (without any communication with me), and failed to leave a phone number for me to call back. She was hiding! They also fact find via email and phone calls, which is terrific for speed and communication. However, after setting a precedence of email or phone calls, they send time sensitive information via email, without any heads up... they are hoping you miss it and forfeit via expiration. Evil policies. Go elsewhere.
This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
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