Motor truck cargo insurance coverage, or cargo insurance for short, is a type of liability coverage that protects drivers while they are transporting someone else’s property. This type of policy is designed to protect both the driver and the cargo from financial loss if items become damaged or lost due to a covered peril while in transit. Currently, drivers are not legally required to obtain cargo insurance in order to operate in the transportation industry, but many truckers and trucking companies seek out coverage to reduce their risk of financial loss.
With no specific requirements from transportation officials to work off of, the question that many transportation clients ask is: when is cargo insurance necessary for a shipment? While it’s ultimately up to truck drivers, trucking companies and their clients to decide whether or not cargo insurance is necessary for a particular shipment, the benefits of coverage greatly outweigh the costs involved.
Cargo Insurance Reduces the Risk of Financial Loss
When cargo needs to be transported, there are several parties that take on the risk of financial loss in the event the items are lost or damaged during transit. The driver, the transportation company, the shipper and the recipient all have some amount of financial exposure related to the shipment. While shippers should, and often do, take all precautions necessary to ensure that the cargo they are carrying arrives safely to the destination, not all factors are under their control. Theft, accidents caused by other drivers and “Acts of God” are sometimes unavoidable, and without cargo insurance coverage, the carrier and the shipper are left to recover financially on their own after a cargo loss.
Reducing Risks Improves the Reputation of Transportation Companies
In some cases, truck drivers and transportation companies have to meet certain requirements in order to acquire cargo insurance, or they may take additional risk-reducing measures such as installing cameras in truck cabs and even apps that limit unsafe driving practices to reduce the cost of their insurance coverage. As an added benefit, these measures can increase their overall safety record and improve their reputation as a carrier.
Motor Truck Cargo Insurance Gives Cargo Carriers Control Over Insurance Terms
Carriers that rely on the shipper’s insurance may find that the coverage terms are not adequate for their shipment, or worse, that coverage has not actually been purchased at all. Furthermore, if a loss were to occur, they would not necessarily be able to be involved in the filing of a claim. Cargo carriers who purchase their own cargo insurance coverage have more control over the insurance terms and are better protected than those who rely on someone else’s coverage.
About American Team Managers Insurance Services
Founded in 1998 by Chris C. Michaels, American Team Managers Insurance Services (ATM) has provided wholesale and MGA services to more than 5,000 independent insurance agents throughout the United States. Our goal is to establish close, long-term relationships with our agency partners and insurance carriers and provide competitive products for the Exclusive and Non-Exclusive markets that we serve. For more information on our products and services, give us a call at (714) 414-1200 to speak to a representative.