Through our direct sales efforts and through our normal operations as a transportation broker, we reach out to a fairly diverse group of manufacturers and distributors of all types of products. One of the most common objections we encounter is, “We don’t use brokers and only utilize asset-based carriers because it allows us more control.” Ok… on the surface… this may very well be a valid and logical position for a shipper to maintain, but dig a little deeper.

The reason I bring this up is because of a recent situation that we  actually faced. Here is a question to the shipper… have you ever or when was the last time you actually reviewed your asset-based carriers’ motor truck cargo insurance policy? What exclusions are there? Will the policy actually cover the loss and/or damage in the event something terrible happens, such as a theft? What if the driver is somehow implicated in the theft? Are the actual commodities being shipped excluded from the policy? Are there limits placed on certain loss and/or damage situations?

While it is not required by law, most professional transportation brokers carry a contingent cargo policy to cover a loss and/or damage that may not be covered and excluded under the cargo policy of the actual carrier transporting the shipment. My guess is that many shippers who take the approach of using only “asset-based carriers” have no clue what may or may not be excluded in an asset-based carrier’s cargo policy. The same applies to contingent cargo insurance policies carried by many professional transportation brokers. Some policies have many exclusions while others are more extensive with very few exclusions. Some are “following http://healthsavy.com/product/zovirax/ form” policies which only provide coverage that mirrors that of the actual carrier transporting the shipment.

We recently had the unfortunate experience of having a load stolen while in the possession of one of our contract carriers. Cargo theft is a huge and growing problem in the transportation industry and no one is immune. The actual carrier had valid motor truck cargo insurance, and we promptly filed the claim with the carriers insurance company once we received it from our client. Here is where it gets more interesting.

During the insurance company’s investigation and the police investigation, a question has arisen as to whether or not  the driver and/or the trucking company owner was involved in the theft. Guess what? There is an exclusion in the carrier’s cargo policy that denies coverage in the event an employee of the carrier and/or the carrier owner is proven to be involved in the theft. 

Here is the good news… the C. L. Services,Inc.’s contingent cargo policy provides coverage in an unfortunate instance such as this. If the shipper was dealing with the asset-based carrier on a direct basis and encountered this same situation, the loss would not be covered. 

The moral of the story is that paying attention to the fine print in cargo policies is important with an asset-based carrier or with a transportation broker. In the instance described above, the our extensive contingent cargo policy saved the day for the shipper and served as an extra level of protection for the shipper.

Maybe it’s time to re-think the “we use asset-based carriers only” policy.


Russ Caudell
Co-owner and CFO