The average annual income of freight brokers is $49,110 according to the Bureau of Labor Statistics. Freight brokers might earn a lot. However, it only takes one lawsuit for a big loss to happen. As a result, those who make money through freight service opt to get freight broker insurance. Let’s discuss what this is.
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Freight broker liability insurance provides coverage when a freight forwarder receives a lawsuit because of property damage, personal injuries, or negligence. Liability insurance policies carriers give to freight brokers are:
Contingent cargo insurance
Errors and omissions insurance
Contingent auto liability insurance
General liability insurance
When the cargo becomes lost or damaged while under the care, custody, and control of a freight broker, clients can file a lawsuit to get reimbursement for any resulting losses. In most cases, the lawsuit can be as expensive as $100,000 or more.
The liability policy in freight broker insurance that will cover lawsuits after cargo in transit got lost or damaged is contingent cargo insurance. Through this, the freight broker can pay the full value of the lost or damaged products and goods. The policy limit can be as low as $100,000. However, insurance companies that specialize in insuring freight brokers provide $1 million up to $2 million.
Note that contingent cargo insurance will only provide coverage if the shipping carrier won’t cover the freight broker using their insurance policy. Also, contingent cargo insurance will only provide coverage for instances of loss or damage while the cargo in question are in transit.
Aside from suing for the cost of their lost or stolen goods, clients and other concerned persons can also sue freight brokers for negligent hiring. Clients expect freight brokers to hire only the best motor carrier. And if it’s proven that the clients suffered damage or loss because the freight broker worked with an underperforming carrier, legal liability can be incurred. The cost of negligent hiring lawsuits isn’t a joke. Here’s an example:
Heyl Logistics, a freight broker, had to pay $5.2 million after a truck it hired caused an accident and killed a person
Freight broker errors and omissions insurance is the policy that will cover incidents of negligent hiring. It gives $1 million up to $2 million so that a freight broker can pay for attorney fees, other legal costs, and compensation to the concerned party.
Freight broker’s errors and omissions insurance won’t only cover negligent hiring. It can also cover a breach of contract. However, its terms will only apply if there's a failure to do the tasks or deliver services in the deal.
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Freight brokers contract motor carriers to ship the goods of their clients. So, it’s important to ask, “ Will the freight broker have legal liability over accidents the motor carrier caused?”. The answer is yes.
There are a lot of ways in which freight brokers can have legal liability over accidents their motor carriers caused. Examples are accusing the freight broker of failing to check the background of the motor carrier, treating the freight broker and motor carrier as a joint venture, and treating the actions of the motor carrier as the actions of the freight broker (acting in concert & civil conspiracy ).
Out of all freight broker insurance coverages, the one policy that will help is contingent auto liability insurance. Contingent auto liability insurance kicks in when the freight brokers face legal liability for the accidents their motor carriers caused. The policy limit of contingent auto liability insurance is $500,000 to $5 million.
Freight brokers will find general liability insurance incredibly useful. For instance, this policy can be used to cover these exposures when running a business:
Third-party personal injuries - Vendors, clients, and visitors might experience a slip and fall or any other types of accidents while on the premises of the freight broker’s office. If the injured person decides to file a claim, general liability insurance will pay for medical expenses and compensation for pain and suffering
Third-party property damage - If not injuries, then vendors, clients, visitors, and other third parties might sustain property damage due to an accident happening within the premises of the freight broker’s office. General liability insurance will reimburse the value of the damaged property if the aggrieved party decides to file a claim
Legal defense costs - Property damage claims and personal injury claims are often contested in court. This is why general liability insurance also offers coverage for attorney fees, court payment orders, administrative costs, and other legal expenses
Additionally, general liability insurance doesn’t only cover personal injury claims and property damage claims. It has these add-ons that provide heightened protection for freight brokers:
Rented premises liability coverage - Rented premises liability coverage is an add-on in general liability insurance that will kick in if fire damages a rented or leased commercial space due to the policyholder’s fault. In particular, this will provide reimbursements if the landlord files a claim
Advertising injury coverage - When a freight broker faces claims for slander, libel, copyright infringement, defamation, and other types of advertising or reputational harm, advertising injury coverage will cover attorney fees, court payment orders, administrative fees, and other legal expenses
Some freight brokers take custody of a client’s cargo before sending it over to motor carriers for shipment. In connection, warehouse legal liability insurance is a useful policy for them. Warehouse legal liability insurance provides reimbursements to customers when items become damaged or lost while stored in a warehouse, storage facility, and other similar locations due to the freight broker’s fault. This insurance offers $500,000 up to $2 million coverage.
When the cargo becomes lost or damaged while under the care, custody, and control of a freight broker, clients can file a lawsuit to get reimbursement for any resulting losses. In most cases, the lawsuit can be as expensive as $100,000 or more.
The policy in freight broker insurance that will cover lawsuits after cargo in transit got lost or damaged is contingent cargo insurance. Through this, the freight broker can pay the full value of the lost or damaged products and goods. The policy limit can be as low as $100,000. However, insurance companies that specialize in insuring freight brokers provide $1 million up to $2 million.
Note that contingent cargo insurance will only provide coverage if the shipping carrier won’t cover the freight broker using their insurance policy. Also, contingent cargo insurance will only provide coverage for instances of loss or damage while the cargo in question is in transit.
Most freight brokers rent or own an office where clients are admitted and documents are processed. Some also own a small storage facility where items to be sent to the motor carrier are stored. There’s a lot of investment when it comes to having a commercial building. And so, many insurance companies offer commercial property insurance for freight brokers. The primary function of commercial property insurance is to cover these:
Building Damage - When a freight broker’s office or storage incurs damage due to fire, theft, vandalism, extreme weather, and other covered perils, commercial property insurance will reimburse the replacement cost or actual cash value of damaged structures
Building Destruction - Fire and extreme weather will destroy a freight broker’s office or storage. In this situation, commercial property insurance will reimburse losses based on the replacement cost or actual cash value of the destroyed building
Commercial property insurance also protects a freight broker’s business equipment and office contents with these inclusions:
Stocks and contents coverage - Stocks and contents coverage in commercial property insurance will cover losses if items inside a freight broker’s office such as office furniture, records, shipping documents, and others become damaged or lost due to fire, theft, vandalism, and other covered perils.
Business equipment and tools coverage - Business equipment and tools coverage will reimburse losses if items integral to the smooth continuity of business operations become lost or damaged due to theft, fire, vandalism, and other covered perils
Freight brokers might also need commercial auto insurance. Commercial auto insurance provides the following protections:
Auto liability coverage - Auto liability coverage covers medical expenses of the third parties who a freight broker injured in a vehicular accident. It also covers damaged property. Commercial auto insurance offers auto liability coverage as its primary inclusion. This means that a freight broker can’t decide not to have it
Physical damage coverage - Physical damage coverage functions to cover parts repair or replacement of a damaged vehicle. It has two types - collision and comprehensive. When fire, hail, storm, and other covered perils damage a freight broker’s automobile, comprehensive physical damage coverage will cover parts repair or replacement. On the flip side, collision physical damage coverage will pay for parts replacement or repair if a freight broker’s vehicle incurs damage after colliding with an object or another vehicle
Medical payments/personal injury protection - Medical payments and personal injury protection will take charge of the freight broker’s medical bills if he or she sustains injuries after causing an accident or getting involved in one. Passengers, if there are any, are covered too
It must be noted that auto liability coverage won’t take care of expenses if a freight broker caused a vehicular accident because of criminal activity - driving under influence, driving in hot pursuit by police authorities, and many more. As for physical damage coverage, it must be noted that it doesn’t cover the replacement or repair of aftermarket vehicle parts.
The Federal Motor Carrier Safety Association requires all who provide freight brokerage services to have freight broker bond insurance. To specify, the agency mandates that every freight broker must have a $75,000 freight broker surety bond insurance.
So how does freight bond insurance work? In simple terms, a bond sees to it that the freight broker can pay any financial obligations to the client in the event of jettison, missed delivery, or failure to complete a service. Freight brokers can use their bonds to pay for the cost of lost cargo or damaged cargo, reimburse the client for business losses because of missed deadlines, and many more.
According to freight insurance brokers, the cost of a surety bond is 1.5% - 2% of the total bond amount. This means that since the Federal Motor Carrier Association requires $75,000, the cost of a surety bond will be `$1,125 or $1,500 a month.
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Know that you can’t opt to get insured immediately. You must satisfy some freight broker insurance requirements to qualify.
The primary requirement for a successful freight broker insurance application is a freight brokerage license from the Federal Motor Carrier Safety Association. These are what you need to do in case you don’t have a license yet and want to get one:
Step 1: Register your freight brokerage at the Unified Registration System
Step 2: Get a surety bond or trust fund agreement from freight insurance brokers or carriers (form BMC-85)
Step 3 : Designate a Process Agent (FORM BOC - 3)
Note that the application for a freight broker license will cost $300, which is not refundable. Moreover, you’ll have to wait for 4 - 6 weeks for the application process to finish.
There are other insurance requirements for freight brokers. For instance, carriers will request you to get a business certification from where you’re living. This is important as it allows them to verify your business location.
You’ll also have to specify to the carrier which businesses you provide freight services. And so, carriers will ask you to send some clientele documents for verification. Why is this? Specifying which businesses you provide freight services helps to determine insurance rates. Note that freight brokers shipping perishable goods have more expensive premiums than those shipping non-perishable goods.
Consumers use truck broker insurance and freight broker insurance interchangeably. Therefore, the answer is yes.
However, there’s one company that offers stand-alone truck broker insurance along with its freight broker insurance - TransInsurers. According to this company, its truck broker liability insurance is a hybrid primary liability policy that addresses the truck broker's general liability arising out of the ownership and use of a truck by the motor carrier of a brokered cargo move, in conformity with a written truck brokerage agreement. TransInsurer’s truck broker liability coverage will answer the cost of bodily injury and property damage.
The average freight broker insurance cost for a $1 million general liability policy is $1,300 a year or $108.33 a month
Contingent cargo insurance for freight brokers is $125 a month or $1,500 a year
Freight brokers pay $47.25 a month or $567 a year for errors and omissions insurance
| Cost per Year | Cost per Month | Best for | |
|---|---|---|---|
| CoverWallet | $35 | $420 | Freight broker insurance quotes comparison online |
| State Farm | $45 | $540 | Freight broker surety bonds |
| Transinsurers | $84 | $1,008 | Custom freight broker insurance limits and deductibles |
| Progressive | $89 | $1,068 | Freight brokers, truck brokers, and transport brokers |
It’s best to check out numerous companies before purchasing your freight broker insurance. Who knows? You might find freight broker insurance companies that offer comprehensive coverage at cheap rates. With that being said, here’s a quick outlook of the best freight broker insurance companies.
| Insuranks rating | 10/10 |
|---|---|
| Best for | Freight broker insurance quotes comparison online |
| Average cost | $35 |
| Year Founded | September 2015 and acquired by AON at 2020 |
| CEO | Inaki Beringuer (former) |
| Headquarters | 101 Avenue of the Americas 18th Floor New York, NY 10013 United States |
| Customer Support | (646) 844-9933 |
| AM Best Rating | A ( excellent) |
| BBB Rating | A+ |
| Number of Complaints | 158 |
Cancel a policy anytime
Get insured online
No lengthy talks with agents
Not an insurance company but an insurance broker
CoverWallet is an insurance broker and online quotes comparison platform that helps customers find the best carriers offering coverage for freight brokers. Note that CoverWallet allows for the immediate purchase of any quote a customer receives. Also, upon getting insured, customers then get access with the MyCoverWallet app for easy online policy management.
| Insuranks rating | 9/10 |
|---|---|
| Best for | Freight broker surety bonds |
| Average cost | $45 |
| Year Founded | 1922 |
| CEO | Michael L. Tipsord |
| Headquarters | Bloomington, Illinois, United States |
| Customer Support | 800-782-8332 and customer service portal |
| AM Best Rating | A++ ( superior) |
| BBB Rating | B |
| Number of Complaints | 538 |
State Farm offers surety bonds for freight brokers such as contract and performance bond, and license and permit bond
Covers freight brokers through its distributor insurance program that offers motor truck liability coverage, business liability coverage, equipment breakdown, and more
Best freight broker insurance for bonds
Doesn’t have a stand-alone freight broker insurance
State Farm has distributor insurance available to freight brokers. Inclusions are commercial property insurance with equipment breakdown coverage, general and professional liability insurance, motor truck cargo insurance, and employee dishonesty insurance. Work with this company because its customer satisfaction rating is high, it's financially stable, and it handles claims fast.
| Insuranks rating | 8/10 |
|---|---|
| Best for | Custom freight broker insurance limits and deductibles |
| Average Cost | $89 |
| Year Founded | 1937 |
| CEO | Tricia Griffith |
| Headquarters | Mayfield, Ohio, United States |
| Customer Support | 1-800-444-4487 and customer service portal |
| AM Best Rating | A+ ( superior) |
| BBB Rating | D - |
| Number of Complaints | 1,313 |
Progressive offers insurance for freight brokers and truckers
Custom policy limits and deductibles
Covers loss or damage to client’s cargo due to fire, theft, collision, and hitting or running over
Has numerous exclusions on its insurance for freight brokers and truckers
Progressive offers freight broker insurance having custom policy limits and deductibles. Primary inclusions are commercial property insurance, contingent cargo insurance, and general liability insurance.
| Insuranks rating | 7/10 |
|---|---|
| Best for | Freight brokers, truck brokers, and transport brokers |
| Average cost | $83 |
| Year Founded | 2002 |
| CEO | N/A |
| Headquarters | 13841 Hull Street Rd #3a, Midlothian, VA 23112, United States |
| Customer Support | 866-748-4200 or mail@transinsurers.com |
| AM Best Rating | N/A |
| BBB Rating | N/A |
| Number of Complaints | N/A |
An insurance company that specializes in the exposures common in freight forwarding businesses
Partner of accredited insurance companies like AIG, Progressive, and Zurich
No online third-party reviews from business watchdogs
TransInsurers offer contingent auto liability and contingent cargo liability insurance for freight brokers. Also, it sells bonds that freight brokers need to comply with requirements. TransInsurers has FreightGuard Spot Cargo Insurance Program that provides comprehensive protection regardless if a cargo got damaged or lost due to a freight broker’s fault or not.
We are dedicated to helping consumers get a freight brokerage insurance quote fast. And so, we included a free generator on this page. All you have to do is click the “Get Quotes” button and provide some details. After finishing, you’ll receive the quotes from the top freight broker insurance carriers sorted from the cheapest to the most expensive or the most comprehensive to the least comprehensive.
References
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.
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!
It really can't get any better than this... wow
Not all those who wander are lost.
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