Cargo Insurance: Why Your Trucking Business Needs It

It’s easy to understand why insuring your trucks is important. You can’t run your business without them, and there are many ways they can be damaged or lost. Bad weather, bad drivers on the road, and even bad luck can damage or total any of your trucks in an accident. Theft is yet another risk. You also understand that setting aside money to cover the loss of your fleet ties up the capital you need for running your business. That’s capital you need to grow your operation and get ahead of the competition.

Similar arguments hold for cargo insurance. The very same accidents that damage your rig will likely damage your cargo. Cargo theft is another concern because criminals find trailers loaded with cargo to be lucrative and easy targets. Your customers will hold you liable for damaged or stolen cargo.

Although there’s no federal law requiring it, most of your customers will expect you to have cargo insurance coverage. The increased business opportunities alone, more than compensate for the insurance premiums. Compensating a customer for lost cargo from your own pocket diminishes your profitability and could end your business.

The Four Types of Cargo Insurance

  • Motor truck cargo insurance. Motor truck cargo insurance covers your liability when an accident damages or destroys the cargo while it’s in transit under your care.
  • Terminal coverage. This protects cargo during short-term storage at a terminal. Terminal risks include fire damage, water damage, and theft. If your transport operations have any kind of complexity, much of your cargo will spend time in terminals. Omitting terminal coverage is a significant financial risk.
  • Warehouse legal coverage. This applies to long-term cargo storage, but is otherwise similar to terminal coverage.
  • Contingent cargo insurance. If you’re a freight broker, contingent cargo insurance protects you against liability suits should your freight carrier fail to compensate a customer for damaged or lost cargo. Your freight carrier could be underinsured, have coverage gaps, or lose their insurance while transporting the cargo. If the customer doesn’t get adequate compensation from the carrier, they will seek restitution from the broker. Don’t allow the well-being of your business to rest on the insurance decisions of your carriers. Many of your customers will require that you carry contingent cargo insurance.

J.E.B. Insurance Services provide cargo insurance in the following states: Florida, Georgia, Texas, North Carolina, South Carolina, Tennessee, Illinois, Iowa & Nebraska. For more detailed insurance information, contact us today.

David Ott

David Ott