Hauling for a Freight Broker
Insurance Requirements Needed
Freight Brokers are essential in the transportation process. The main responsibility of a freight broker is to connect shippers and carriers so loads get to their destinations on time. In order for this seamless process to work the brokers must find and work with reliable partners.
Brokers & Carriers
Although brokers work alongside shippers and carriers, this article aims to shed light on specifically the broker-carrier relationship. Most carriers utilize brokers to find loads for their business. According to the FMCSA, this is because a “motor carrier cannot broker loads without first applying for and receiving a license to operate as a property broker”. In order for brokers to work with a carrier, there are certain requirements that the carrier must meet. The most important requirements pertain to a carrier’s insurance coverage.
Firstly, what makes a trucking company operable is that they have an active authority. The FMCSA requires that the company must hold a minimum of $750,000 Auto Liability Coverage to keep its authority active. When it comes to freight brokers, most require the carriers they work with to possess at least $1 million in Auto Liability coverage.
With regards to the $250,000 extra brokers require, this covers both the freight broker and the shipper in the event of a loss. Also, the average cost for any loss involving a fatality equates to $1 million but can increase to $3 million when factoring in property damages, funeral costs, pain and suffering compensation, attorney fees, and more.
Motor Truck Cargo
Secondly, brokers must make sure that the cargo being shipped is covered as well. This is why most freight brokers require a carrier to hold a minimum of $100,000 in Motor Truck Cargo (Cargo) Coverage¹.
Insurance Company Rating
Lastly, freight brokers look to see if your insurance company is rated. Preferably, they look to see if your coverages are provided by A-Rated insurance companies. This demonstrates to the brokers how financially solvent the insurance company is in case a claim occurs.
An Insurance Solution
Marquee Insurance Group (MIG) has access to over 50 A-Rated insurance companies and works closely with one of the nation’s top Freight Brokers, Nolan Transportation Group (NTG). “[MIG] looks at data, they look at carriers, and they want them to succeed,” says NTG’s founder, Kevin Nolan. “If you’re a trucking company and you’re not thinking about them as your insurance agency, you’re not thinking about it the right way, because they are the best transportation partner you can have.” If you are looking for the right coverage to haul for a freight broker, call one of our agents at (833) RING-MIG. Like Kevin says, “They know a lot about trucking.”
¹Cargo limits may vary depending on the commodity.