Motor Truck Cargo Insurance

Cargo coverage is essential when a company is doing business in logistics, transportation and other types of freight expediting.

Cargo insurance consists of liability coverage defending the carrier against claims alleging negligence by the carrier in delivery or failure to deliver as defined by contract. The terms of the contract between the expediter and the recipient will dictate the validity of the claim. Acts of God, Acts of War, Public Enemy and confiscation on the part of law enforcement are all possible exclusions from coverage.

Cargo physical damage coverage applies directly to the amount or limit of coverage, for example, $100,000 of total cargo coverage is the limitation of coverage protection regardless of the degree of negligence on the part of carrier.

“It is absolutely critical that the freight carrier declare the type of cargo being transported, he should make this declaration to his insurance company as the rate and coverage parameters are set based on the type of cargo stipulated.”

Cargo Insurance is routinely available on a Basic Risk basis or an All Risk basis. Both policy types are subject to specific exclusions requiring a coverage review with an insurance professional at policy purchase and repeatedly as changes occur pertaining to type of cargo expedited.

Cargo transported within the state lines where the motor truck is garaged is classified and intrastate travel. Cargo transported across state lines is classified as interstate travel. Mileage radius is assigned  normally in increments  0 –100, 100-300, 300-500 and 500 – unlimited mileage  once again it is apparent the length of cargo transportation is directly attached to rate assessed to the coverage.

When the freight expediter has more than one vehicle or a fleet of transport vehicles it is critical to assign the proper type of cargo and radius to each vehicle specifically and make changes as the vehicle usage changes as it applies to the cargo in transport. Always be aware, cargo coverage is specific to the vehicle hauling the cargo.

In cases where the cargo under transport may be subject to spoilage or deterioration due to refrigeration failure on the part of the carrier, the carrier may seek to add a Mechanical Breakdown Endorsement. It is very important to confirm the limit of coverage supplied by the endorsement to be sure it covers the entire amount of the fragile cargo under transport.

Remember to consult your insurance professional on all specific coverage matters before purchase of coverage and whenever changes occur.