What Cargo insurance may NOT cover for Expediters

Last Modified: April 1, 2024

What about Cargo?

By Shelly Benisch
Risky Business Blog Posted Mar 11th 2016 ExpeditersOnline.com 11:13AM

Everyone knows that Cargo insurance generally covers theft, fire and collision, but ever wonder what it doesn’t cover?

Last time we talked about Liability insurance, where you’re driving along and you hit someone or something.  We also talked about Physical Damage insurance that covers your unit for Comp or Collision.

But what about Cargo, or the “stuff” you’re hauling?  Many Motor Carriers still provide this insurance for their Independent Contractors, but an increasing number don’t provide it and require you to purchase that coverage.

Pages could be written on this subject, but let’s keep it simple.

What does the average “Cargo” policy protect?

Mainstream Admitted policies you’re familiar with are standard and cover the cargo in your unit for theft, fire and collision.  There is usually some amount of Debris Removal or Pollution Clean up, Earned Freight, Sue & Labor and Equipment Protection.

Most of the “stuff” Expediters haul is covered as “General Freight”, but what isn’t?

First off, if you’ve switched to hauling either refrigerated freight or items that need to have their temperature controlled, be sure you’ve added “Reefer” to your cargo policy as an endorsement.  This is not automatically covered in a Cargo policy, and needs to be added as an endorsement.

Reefer covers the freight for spoilage or damage due to a change in temperature as a result of sudden or accidental breakdown.  Your unit must be able to provide proof that it’s been properly maintained by a qualified technician at the time of the loss for the claim to pay.  There is no coverage when a unit breaks for normal wear and tear that could have been prevented with maintenance.

I’ve seen claims denied for plants and potatos that should have been kept warm as well as paints and chemicals that should have been kept cold.  Seems simple but it happens…don’t check off on your paperwork that you have reefer if you don’t or you’re responsible for a loss by taking that load.

No reefer needed?  OK, what if someone asks you to haul something else outside of the normal “general freight” in expediting? Again, be careful what you sign off on, because most policies have standard excluded commodities which include art, jewelry, semi-precious metals or alloys, money, papers, contraband, prescription pharmaceuticals, tobacco, hard alcohol, explosive or radioactive material, mobile homes and shipping containers.

Some also exclude electronics or charge a higher deductible for that coverage while others exclude any damage due to moisture.  Though rare, some actually exclude theft altogether, and it needs to be added back onto the policy in the form of an endorsement.

If you’re hauling or towing cars, don’t assume that’s automatically covered either.

Two very important items to note:

1.  If you’re a Motor Carrier, your own cargo coverage is excluded if the property is in the custody of any other Carrier.

2.  If you’re an I.C., your cargo coverage must be endorsed with Care, Custody and Control in order for it to “trigger” and pay out as you expect while hauling on behalf of a Motor Carrier.  The Legal Liability Cargo forms out there are designed to protect a Motor Carrier but not necessarily the I.C. so they need to be endorsed to do so.

Be sure to read special notices and exclusions on insurance proposals as some require the I.C.’s name on the Bill of Lading.  Is the I.C.’s name on the Bill of Lading?   How are you turning in a cargo claim should one occur?  I encourage you to request the actual insurance policy language of how the policy is designed to protect both the I.C. and the Motor Carrier.  For example, does the Motor Carrier have the legal right to submit a cargo claim on his I.C.’s policy?  This is why endorsements matter.

Remember that the insurance companies determine who is responsible for cargo loss based on contracts, bills of lading and other shipping documents.   Avoid a lawsuit and get your paperwork ducks in a row regarding who has rights to that cargo loss reimbursement AND any defense costs that could come into play.


  • 2002 Founder and CEO of Commercial Insurance Solutions, Inc., Shelly Benisch specializes in providing Commercial Truck Insurance for owner operators and small motor carriers. Both CIS and TRS certified, She also writes a free educational trucking insurance advice blog dedicated to the little guy.

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