The handling and transporting of goods for clients or customers often come at great risk to freight forwarders. Contingent cargo liability brokers sell policies that provide for investigation, indemnity and defense costs to a trucking company faced with a claim for a loss or any damages incurred.
A policy of this type is designed to protect a transportation broker or freight forwarder against any liability they may assume when making arrangements to transport cargo for other individuals. Contingent cargo legal liability provides coverage any time that a trucker’s primary motor truck cargo policy fails to assume such responsibility. The policy responds to the legal liability that transportation brokers and freight forwarders must assume under law.
Attorney fees and defense costs
It is the responsibility of anyone doing business to protect their firm from lawsuits relating to claims of cargo damage and/or theft. For example, if a trucker’s motor truck cargo policy fails to satisfy a legitimate cargo claim and a suit is instituted against the freight broker or forwarder, they need to have coverage in defense of the suit.
The costs associated with these types of lawsuits can be rather significant, even in a case where the claim is without grounds. With this particular coverage, your firm will avoid incurring any legal expenses associated with defending or, if ruled against, paying the cargo claim. The cost of attorney’s fee, plus any settlement amount will normally be paid, up to the policy limit.
As more trucking companies expand their services to include brokering freight they will also need to have additional coverage for the additional exposures and risks they’ll be facing. Traditionally, trucking companies would assume that there is no liability involved when another trucking firm is transporting the cargo.
The assumption is that the contracted carrier would, therefore, be responsible to insure the freight under his or her own cargo policy. Unfortunately, it’s not always that simple. How the damage occurs, and when, may be inconclusive and leave the issue difficult to resolve. Having a policy purchased through contingent cargo liability brokers helps to alleviate these concerns.