30
contingent cargo insurance
- Thread starter Freight Broker
- Start date
30
The carrier has to provide the insurance - you cannot get extra insurance to cover someone else hauling cargo. The standard in the industry is $2 a lb and anything over that is 2% of the value. If the shipment is cross border then the whole value of the load is insured.
I stopped buying contingent cargo insurance about 3 years ago when the cost skyrocketed to a usurious level. The tipping point came when I read the restrictions and covenants contained within the policy. Basically, it provided coverage to "protect" me as a last resort only. It even prohibited disclosure of the existence of said policy to carriers, customers, or any other party. So, I couldn't even use it as a selling point. The conditions were such that it seemed unlikely that there would ever have been any circumstances that would have enabled a claim against it.
One last thing about insurance - contingent cargo insurance or otherwise - when you buy insurance, your not buying protection, all your buying is the right to litigate the insurer when they deny your claim. And for that, you need very deep pockets.
10
We just went through the very same thing with one of our clients.
We hauled a bunch of loads with values from $150,000 to upwards of $2M.
We gave the customer 2 choices...
1 - They would pay the cost of cont. insurance
2 - Self insure all the freight themselves.
Once they got the quote from our insurance co., which amounted to $25,000.00 + per load, they chose to self insure by putting a rider on their own policy (at a minimal cost).
They sent us a copy of their insurance as well as a letter relieving us of all claims.
I would recommend this action to all trucking companies that their shippers are asking them to carry huge cargo insurances.
We hauled a bunch of loads with values from $150,000 to upwards of $2M.
We gave the customer 2 choices...
1 - They would pay the cost of cont. insurance
2 - Self insure all the freight themselves.
Once they got the quote from our insurance co., which amounted to $25,000.00 + per load, they chose to self insure by putting a rider on their own policy (at a minimal cost).
They sent us a copy of their insurance as well as a letter relieving us of all claims.
I would recommend this action to all trucking companies that their shippers are asking them to carry huge cargo insurances.
30
Thanks for the relies. I don't have it now either...and I'm awaiting some quotes. Only reason I'm looking at it is due to a new customer who says he requires it of brokers. I'm looking at his volumes on the load boards and the rates and will have to make a judgement as to whether getting this is worthwhile or not..based also on my abilities to cover his loads of course. BTW..excellent points about insurance coverage.. never thought of it that way before but you're right.