Freight brokers act as facilitators in the logistics world by pairing a company that needs freight shipped with a reliable carrier. They are responsible for finding services, providing paperwork, and knowing how to track where a shipment is at all times. While freight brokerage firms are essentially the middle man in the logistics world, it does not always absolve them from liability claims.

Coverage Options

There is no law that requires a freight broker to carry any type of cargo insurance. However, it can be risky to operate without insurance as there have been historical examples of third-party operations being held liable. The knowledgeable experts at explain several forms of insurance freight brokers should consider having:

  • Contingent cargo – If the carrier refuses to honor a freight claim, the shipper may fall back on the broker. This is where this policy would provide protection.
  • Vicarious auto liability – A brokerage can still be held liable for injuries and negligence based on the fact they hired the carrier. This coverage would defend against those situations.
  • Errors and Omissions (E&O) – This is more of a catchall for issues that occur not directly related to the freight handling itself.

Even though a brokerage firm isn’t physically handling freight, there are still potential risks. Having insurance coverage can mitigate these risks.

Why Insurance for Freight Brokers is a Wise Move