Rig Insurance South Carolina: About Contingent Cargo Insurance

Why should a freight broker, who simply arranges for carriers to transport freight between the shipper and receiver, take out contingent cargo insurance? After all, it’s the carrier’s job to transport the cargo, and the carrier also assumes responsibility for its safety. If anything should happen to the load, it’s clearly the carrier’s fault. In addition, the carrier also has cargo insurance to cover loss or damage to the freight. Finally, the law doesn’t even require the freight broker to carry contingent cargo insurance.

However, damages can exceed the maximum payout of the carrier’s cargo insurance policy. The carrier’s insurance may have exclusions on specific types of cargo such as garments and apparel for example. The carrier’s insurance may lapse while the freight is in transport, or could get canceled because a premium wasn’t paid. In short, there’s no guaranty that the carrier’s insurance will assume responsibility. When this happens, either the shipper or the receiver may seek damages from the freight broker.

Another reason for carrying contingent cargo insurance is that it’s good business practice. Some shippers won’t do business with freight brokers who aren’t covered. Without coverage, the broker is unable to take responsibility if something happens to the cargo. This doesn’t inspire trust, and will limit the freight broker’s business prospects. It isn’t enough to tell the shipper that the carrier’s insurance will handle any losses or damages because there are many instances where they won’t. When the shipper can’t get compensation for damaged or lost freight, the freight broker’s reputation suffers.

If you are a freight broker with questions about contingent cargo insurance, or a commercial or owner operator trucker with questions about South Carolina rig insurance, J.E.B. Insurance Services is happy to answer your questions. We have been insurance underwriting for 17 years, and can provide excellent coverage at affordable rates. Contact us today.