Transportation Intermediaries Association
Published in the Marketplace Digest November 13, 2023
The Must-Have Insurance for Brokers: Contingent Auto Liability

Content Provided by Roanoke Insurance Group Inc

The Must-Have Insurance for Brokers: Contingent Auto Liability

The Must-Have Insurance for Brokers: Contingent Auto Liability

  By: Roanoke Group

THE LIABILITY LANDSCAPE for the trade and transportation industry is changing. Carrier accidents on the road resulting in bodily injury and property damage (BIPD) claims pose a real financial threat to brokers, forwarders, and other transportation intermediaries. Recently, the number of large trucks involved in fatal crashes and the resulting jury awards have skyrocketed. Inconsistent application of the law has put the burden of these “nuclear verdicts” on not just the carriers but also the broker-forwarders responsible for hiring the carriers.

Contingent Auto Liability Coverage

When innocent citizens are injured or killed in a trucking accident, the liability assigned to the broker-forwarder may be broader than Contingent Auto Liability (CAL) is intended to address. Because the carrier who physically operates the motor vehicle is first in line for third-party BIPD claims, the intermediary’s exposure is considered contingent. CAL is intended to defend the intermediary against allegations of responsibility. However, when these claims play out in court, the broker-forwarders are often held accountable based on vicarious liability or negligent carrier selection.

Best Practices to Protect Your Business

CAL insurance is vitally important for every transportation intermediary who arranges for the movement of cargo by truck, and there are a few strategies broker-forwarders can employ to secure this coverage:

  1. Establish a relationship with an experienced insurance broker specialized in transportation and logistics. The intricate, everchanging landscape of this industry requires an expert to identify exposures, explore risk transfer solutions with appropriate insurance companies, and present effective solutions.
  2. Develop a consistent, repeatable process for carrier vetting. The insurance companies that do offer CAL coverage have implemented stringent underwriting guidelines to manage exposures and losses. They will expect a vetting strategy that includes verification of the carrier’s authority, SAFER score and valid insurance.
  3. Review and hone marketing materials. Underwriters review the intermediary’s website and published documents to ensure broker-forwarders represent themselves as intermediaries. Any implication that the intermediary may be operating assets or taking a broader role in the transportation activity are red flags which may result in declination.
  4. Conduct an audit of all contracts including your own terms and conditions and review the relationships and agreements between all involved parties. A transportation intermediary needs published “Terms & Conditions of Service” (Ts & Cs) which are effectively communicated to their clients to define the intermediary’s role in the process and outline the parties responsible for cargo damage, third-party bodily injury and property damage. When clients require agreement to terms outside the broker-forwarder’s Ts & Cs, the intermediary should utilize a standard broker/client contract format. These agreements are available to TIA members free of charge, and many legal professionals also provide these forms as part of their service.

Please contact us at 1-800-ROANOKE (866-934-8174) or via email at

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Disclaimer: The descriptions of coverage described above are generalized and are subject to the specific policy’s terms, conditions and exclusions. For full coverage details, please refer to the actual policy forms. This content is not an offer of insurance, nor does it provide insurance coverage to the reader.



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