COMMERCIAL CARGO INSURANCE: Coverage, Cost & More.

For-hire truck drivers need cargo insurance to protect the goods they transport. Cargo insurance protects the policyholder from financial loss in the event of cargo damage or loss as a result of certain perils, such as collision, fire, or load hitting. This article talks about commercial cargo insurance coverage companies, their costs, and quotes.

Overview

Cargo insurance, often known as motor vehicle cargo insurance, protects the goods being transported by a truck driver who is being paid by the mile. It protects you from legal action in the event of cargo loss or damage due to things like fire, collision, or being struck by another shipment.

Transporting products is a risky industry, but so are all businesses. There are several opportunities for something to go wrong throughout the many stages of a product’s journey from the manufacturer to the end user. Multiple shipping containers go missing at sea every year. Good news: shipping insurance exists to safeguard your customers’ investments in their goods.

Many shippers don’t fully understand their legal responsibilities in the event of a shipment loss. Liability issues might be further complicated by regulations and procedures for the loss of products. We discuss what cargo insurance is, why it is important for commercial trucking operations, the different types of transportation operations that cargo insurance can help, the highlights of this coverage, the advantages of offering cargo insurance to commercial transportation operations, and what to look for in a partner that provides cargo insurance to help you and your clients navigate this liability. Cargo insurance can refer to either shipping goods via truck or shipping goods via water.

#1. Motor Truck Cargo Insurance

Your client needs motor truck cargo insurance if they transport goods by utility vehicles or trucks on land. Some of the dangers of land-based freight transport, like collision damage and theft, are covered by this policy.

#2. Marine Cargo Insurance

Marine cargo insurance is necessary if your client regularly sends shipments across the world via sea or air. Aircraft and ships are protected from a variety of perils thanks to this insurance, including accidental damage, bad weather, loading, and unloading. There are various types of marine cargo insurance coverage available.

Partial losses are typically covered by general coverage, the go-to insurance policy for shippers.

All-risk coverage: With cargo insurance, your clients can get protection against major damage or loss caused by external sources like vermin, theft, or harm by incorrect handling.

Coverage from warehouse to warehouse shields your client from financial loss in the event of cargo damage or loss during transit.

However, it might be challenging to prove a carrier’s liability. It may be difficult to determine who is at fault for damage if the shipment has been handled by multiple companies while in transit or storage. There are also types of damages that carriers are not responsible for, such as:

Fire.

calamities of nature.

The ocean’s current state.

Inadequate packaging.

Commercial Cargo Insurance Coverage

Cargo insurance can cover external causes of damage and loss to cargo. Cargo insurance isn’t mandated by law, but it’s worth it for anyone shipping valuables. Having sufficient insurance is crucial since some risks might have disastrous consequences. Clients can benefit from your guidance as they weigh the expense of cargo insurance against the risks they run without it. Cargo insurance typically covers losses due to common causes, such as:

Piracy.

Wars act.

calamities of nature.

Customs refusal.

Auto incidents.

The dumping of cargo. And more.

What Is Covered by Insurance for Commercial Cargo?

The following is what commercial cargo insurance covers:

#1. Contingent Cargo Insurance

Legal liability insurance protects truckers if their primary motor truck cargo policy does not pay for cargo loss or damage. Any business that arranges to carry goods for another, such as a transportation broker or freight forwarder, should have this form of insurance.

#2. Terminal Coverage

Cargo at designated terminals is insured against theft. In most cases, there will be a time limit attached to this protection. For instance, 72 hours maximum per load. However, it is recommended to obtain warehouse legal coverage if the products will be stored for more than the terminal time. This level of protection is tied to the aggregate volume of commodities docked or offloaded at any given time.

Cargo Insurance Requirements

Trucking companies still need to carry cargo insurance even if the FMCSA no longer requires it of most for-hire motor carriers. However, specific criteria may differ.

‍#1. Household Goods Transport Company Offering Interstate Services

For each vehicle, the FMCSA mandates $5,000 in coverage, and for each incident, $10,000 in coverage.

#2. Household Goods For-Hire Intrastate Transport

Carriers should check with their state’s regulatory agency to ensure compliance with the FMCSA’s minimum standards, which are generally followed by most states.

#4. Carrier for Hire, Interstate, and Intrastate (Other Than Household Goods)

Most shippers and brokers will insist on a minimum of $100,000 in cargo insurance coverage, even if doing so is not mandated by law.

#5. Intimate Transport

Private transport companies can decide how much coverage to carry in the event of cargo loss or damage.

Types of Cargo Insurance

The following are the many commercial cargo insurance options available to motor carriers:

‍#1. Combined Policy

Commercial truck insurance policies can include both cargo insurance and other types of coverage in a single package.

#2. Stand-Alone Cargo Insurance

It may be necessary for trucking businesses transporting unusual freight to look for separate insurance to locate an insurer willing to take on the additional risk. Depending on their needs and budget, businesses may also choose to purchase stand-alone coverage.

#3. Cargo Insurance for Trucks

Truckload insurance is also offered, and it is technically a separate type of coverage. This is typically done when the value of the cargo being transported is significantly higher than the average load or when the prices of all of the loads being transported vary widely from one another.

Commercial Cargo Insurance Companies

If the cargo they are transporting is lost, stolen, or destroyed, the motor carrier will be held responsible. Cargo insurance, often known as truck cargo insurance or inland marine insurance, protects you financially against losses related to damaged or lost cargo, as well as cleanup and pollution removal costs. When traveling for a customer, many will insist that you get cargo coverage to protect their cargo. However, it might be challenging to prove a carrier’s liability.

Cargo is covered by some policies while it is being loaded or unloaded, or while it is waiting to be distributed, at a terminal or pier. It may be difficult to determine who is at fault for damage if the shipment has been handled by multiple companies while in transit or storage. Coverage, customer service, cost, and stability are just a few of the factors we considered when ranking the top cargo insurance providers to help you select the proper policy. The following are the commercial cargo insurance companies below:

#1. Progressive

When it comes to insurance, Progressive is one of the most prominent names in the country. Insurance for business trucks is only one of many policies they provide. Commercial truck insurance from Progressive may be tailored to the exact needs of any business, no matter its size. Insurance for liability, property damage, cargo, and third-party drivers is available. Progressive has also earned a reputation for low rates and helpful staff.

#2. Travelers

Insuring both individuals and businesses, Travelers is among the top insurance providers in the country. With options for liability, bodily damage, cargo, and other specialty insurance needs, their commercial truck insurance products are designed to meet the needs of the trucking business. Travelers are also well-known for their innovative risk management technologies, strong financial position, and a wide network of independent agents.

#3. The Hartford

Hartford is an established insurance provider that has served American businesses for many years. To safeguard businesses and their trucks from danger, they provide commercial truck insurance. Liability, property damage, cargo, and more specialist coverages are also available. The Hartford is well-known for being financially secure, providing extensive protection, and providing outstanding service to its clients.

#4. State Farm

When it comes to commercial truck insurance, State Farm is a top choice because of the company’s size and breadth of offerings. State Farm provides commercial truck insurance products tailored to the specific requirements of trucking companies, including options for liability, physical damage, cargo, and more. State Farm has established a strong reputation in the community thanks to its extensive agent network, affordable rates, and dedicated support staff.

#5. Coverwallet

CoverWallet is a web-based insurance marketplace that streamlines the policy-buying procedure for small and medium-sized enterprises. Through connections with numerous insurance companies, they provide commercial vehicle insurance plans. However, with CoverWallet, businesses can quickly and easily compare insurance prices from numerous providers. The software also facilitates digital policy administration and claims processing.

Commercial Cargo Insurance Cost

Motor carriers that transport goods and commodities for others are offered financial security by purchasing cargo insurance, often known as freight insurance or inland marine insurance. Cargo insurance protects your shipment from losses due to fire, collision, and other road hazards like being hit by a vehicle or having objects fall on top of it.

When protected cargo is damaged or lost in transit under a bill of lading or shipping receipt, the insurance policy kicks in. Cargo is protected throughout the whole shipping process, from loading to unloading to waiting for the recipient to sign for it at the terminal or pier. Commercial cargo carriers can save cost on insurance by avoiding the lowest policies and following a few simple strategies. The following carriers looking for the best possible price should:

‍

Obtain several quotes.

Inquire about any up-front payment discounts that may be available.

Increase your deductible.

Install cameras and GPS trackers in vehicles for added security.

The cost of commercial cargo insurance can vary greatly depending on various factors, making it difficult to establish a definite price range. To give you an idea, commercial vehicle insurance premiums can be anywhere from $2,000 to over $20,000 per truck per year. Costs associated with commercial cargo insurance can be affected by the following variables, including:

#1. The Truck’s Make, Model, and Price

The insurance premium may fluctuate depending on such factors as the truck’s year of manufacture, model, and overall value. Insurance rates tend to be higher for newer, more expensive trucks.

#2. Choices for Insurance

Your policy’s premium will vary widely depending on the types and amounts of coverage you select. Also, increasing one’s coverage limit or adding more types of coverage will likely increase one’s premium.

#3. Value and Kind of Cargo

The insurance premium might also be affected by the nature and value of the transported cargo. High-value cargo or cargo that is more prone to damage or theft might lead to higher premiums.

#4. Situation Geographically and Operational Radius

Insurance costs for trucks might vary depending on factors like the location where they are driven and how far they travel each year. However, insurance costs could increase if your business is located in an area with a lot of accidents or thefts. Insurance premiums are higher for long-distance truck drivers since their vehicles are in greater danger.

#5. Record of Previous Driving Experience

Commercial truck insurance premiums can be significantly impacted by the drivers’ level of experience and driving histories. Insurance rates tend to be cheaper for drivers who have not been in any accidents or citations and who have logged many miles on the road.

#6. Deductible

When you file a claim with your insurance company, you will be responsible for paying the deductible amount before your policy begins to pay anything. If you choose a higher deductible, your insurance premiums will be reduced, but you will be responsible for a larger amount of any claims.

#7. Claims Past

Insurers may assess a higher risk profile for a company due to a claim history, which could lead to higher premiums.

Commercial Cargo Insurance Quotes

In commercial cargo insurance quotes, it is your responsibility as a truck driver to guarantee the delivery of your client’s shipment or to offer compensation in the event of damage or loss. Motor carriers run the risk of having their finances drained by legal liability for lost property, as many things might go wrong when items are in transportation. The following are some insurance quotes for commercial cargo:

#1. To What Extent Should I Insure My Cargo?

It’s not always clear how limits, deductibles, and exclusions work. The freight coverage limits that the shippers and freight brokers require for the load will determine how much cargo insurance you need. However, it’s never a good idea to transport goods for a business whose value exceeds your insurance coverage. Check your cargo coverage limits against the total value listed on the bill of lading.

#2. How Simple Is It to Obtain Proof of Insurance for Your Freight?

You don’t want to lose a lucrative job because you can’t submit a certificate of insurance in time. As part of their insurance services, your insurer should be able to immediately provide you with this information; ideally, you should be able to access it online whenever you choose.

#3. Is It Possible to Get New Insurance Promptly?

If you stumble across an unexpected lucrative opportunity, can your insurance agent assist you in getting coverage for goods that aren’t normally part of what you haul?

Is Commercial Insurance the Same as Cargo Insurance?

Cargo coverage is not generally included in commercial trucking insurance, although it covers a wide range of risks. Cargo insurance protects against such risks. However, this form of insurance, as the name implies, is meant to protect the goods you are transporting.

What Risks Are Covered in Cargo Insurance?

It pays for any losses and repairs. However, if the claim is substantial, a surveyor may be dispatched to the site to assess the loss or damage. However, there are typical exemptions, such as in the case of faulty packing or a product being rejected by Customs.

How Much Is Cargo Freight Insurance?

The price of cargo insurance is typically calculated as a proportion of the shipment’s value or of the shipment’s value plus the cost of shipping. Freight brokers typically offer policies that insure for 60% of the shipment value. There is a maximum insurance value of $2 for every $100 of cargo.

Who Can Provide Cargo Insurance?

Cargo insurance is available from numerous sources, including insurance companies, brokers, and online marketplaces. However, cargo insurance is an optional extra that may be provided by some logistics and transportation firms.

Does Progressive Offer Cargo Coverage?

Many risk managers now mandate cargo insurance for truckers. Progressive’s Motor Truck Cargo Insurance satisfies this mandate.

Is Cargo Insurance Worth It?

Disaster relief is only one reason why cargo insurance exists. Similar to homeowner’s insurance, this coverage helps you recoup financial damages if your cargo or freight is damaged or stolen. It is customarily the responsibility of the shipper to secure cargo insurance.

What Are the Two Kinds of Cargo Insurance Policy?

The two most common types of cargo insurance that an importer can acquire are all-risk and named perils.

Is Cargo Insurance Necessary?

There is no necessity to obtain cargo insurance. It’s not required, but it’s strongly suggested so you can safeguard your merchandise from potential disasters.

What Is Not Covered in Cargo Insurance?

In a nutshell, marine insurance often does not cover the following:

Losses or damages sustained because of carelessness or bad behavior.

Incorrect packaging may cause loss or damage.

Loss or damage due to cable, strike, riot, or civil disorder.

Cleanup and removal of debris from an accident site.

Who Pays for Freight Insurance?

The CIF shipping term is used in international trade when goods are transported by sea or river. Under CIF, the shipping fees, insurance, and freight for the buyer’s cargo are all covered by the seller.

Conclusion

Carriers operating for profit must carry carrier liability insurance. To safeguard their goods against loss, damage, or theft in transportation, most shippers opt for additional cargo insurance, despite the policy’s restricted coverage. The value of cargo insurance cannot be overstated. It’s a cheap approach to guard against product loss and damage during shipping for both you and your clients. Professionals in this area can be found if your trucking firm handles cargo.