Where Are All the Freight Broker Insurance Markets Going?

Insurance in the 3PL space has evolved over the past decade. Does it sound backwards that exciting innovations in this arena have led to wariness among insurance providers, supported by an unprecedented cadence of claims? Innovation should be enthralling, though it has caused some big pivots for insurance providers of 3PLs.

What this means is that a traditionally static industry has become fluid in order to accommodate the changing landscape of risk management. It has been highly publicized that freight brokers and their insurance partners are being named in lawsuits and claims in which they may not even be liable. Freight brokers are easy targets in litigation being directly involved with a majority of the over-the-road shipments in the US. This necessitates their having to respond to claims which is a financial burden on both brokers and insurance companies.

Even the ways in which a 3PL may be found liable have shifted, causing insurance markets to have to pay out on a broader variety of claims situations or deny their trusting clients’ claims altogether. These changes and innovations have reformed the ways in which insurance providers are willing to work with clients, and have even changed the roster of insurance providers willing to write 3PL coverages – companies keep bowing out altogether.

Where did it start? With the misconceptions of insurance agencies.

Like with any trend generating revenue, property/ casualty insurance agencies who didn’t have a firm grasp on transportation risk jumped at the thought of 3PLs being lucrative clients. Several of these markets jumped head first into the logistics pool customizing coverages which sound like logistical coverages, but don’t necessarily respond as described. Think of an experienced market writing a true Contingent Cargo form versus a less experienced but eager market writing a Contingent Property in Transit Floater coverage. Their Floater coverage may be seen as more of a business personal property coverage for goods in transit, but isn’t created to necessarily respond in the same fashion or cover the full value of brokered goods. In a land grab, many of these inexperienced in transportation markets wrote coverage for as many 3PLs as possible without having seen true loss history or knowing the premium to claims ratio they would experience.

Cue reality – policies designed by emulating true logistical coverages had to decide how they would respond to the variety of claims which were being filed against freight brokers. Workers Compensation markets struggled to reconcile an employee who works out of an office but is closely connected to over the road truckers. As claims began to stack up, some markets took major losses at a higher frequency than anticipated. These losses would impact their pricing for the core business outside of transportation as well, raising their premiums across the board. This unappetizing loss ratio was becoming a common occurrence as freight brokers were increasingly looped into nuclear verdict cases which have put both transportation companies and their insurance providers in the most challenging situations.

On the other side of the coin, some markets decided to limit their liability and cost by exercising an OPTION to defend their 3PL clients instead of a DUTY to defend clients in the event of a claim, which is now more common. Freight Brokers could see that many of these insurance markets didn’t offer true protection in their policies and claims were getting denied at a high frequency.

What was the result of clients feeling misled by weak coverages and standard property/ casualty insurance companies being in over their skis on claims? An exodus of insurance markets able to write these coverages. In the past seven years, numerous reputable insurance markets have pulled out of the 3PL game and each time they do, other agencies are either strengthened in absorbing their clients or weakened in dealing with more losses and then having to sell at higher premiums to offset said losses.

There are fewer insurance companies writing coverage for the modern 3PL and it may be speculated that another few insurance markets could be dropping out of writing coverage in the coming years. The direct response to the limited number of insurance companies currently playing ball and their higher number of losses is increased premiums across the board.

Freight brokers have asked, “If I have no losses and my revenue hasn’t increased, why are some markets quoting higher prices than last year?”

While most insurance quotes will be rated on the gross freight receipts of a 3PL, the sheer volume of losses has raised the rate at which many 3PLs will be rated. This means that even if the same GFRs are maintained year over year, losses on cargo could raise every company’s cargo premium across the board in a certain market.

Reliance Partners

Does this mean that the freight broker insurance landscape is becoming monopolistic with fewer major players?

Not necessarily, and with good news attached. Most of the market leaders who have pulled to the top of insurance underwriting are specialized in their approaches to risk management. As with evolution, the strongest are forefront and able to absorb the large cadence of claims and continue to support their transportation clients. We are seeing the strongest and most innovative coverages on everything from usage-based cargo solutions to auto liability limits of coverage extending higher than were previously attainable for the price. Even if insureds only have their pick of the 4 – 7 top insurance markets, their broker/agents have the task of knowing coverages and market highlights in order to assign clients the best markets for their needs.

What we may see is a deeper loyalty to insurance markets from their clients and agents. Doing right by a client is as effective as ever in winning and keeping business. Conversely, those same insurance markets doing wrong by clients could lead to fewer submissions, binds, and less financial stability. There are exciting times ahead as insurance continues to pace with the innovation of 3PLs. Risk may be evolving, but risk management is making leaps and bounds to predict the coming trends in what was once seen as a more static industry. Finding the right broker/agent to help navigate the changing landscape is crucial now more than ever to ensure a 3PL isn’t getting an “off the rack” policy which may look great on a COI but has so many exclusions it excuses itself from many claims situations.

Reliance Partners is the nation’s fastest-growing and most diverse insurance brokerage with a sole focus on the logistics and transportation space. Their Logistics Team writes coverage for 50 of the top 100 freight brokerages in the country as well as that of the ambitious new venture and everything in between. Reliance leverages its relationships with the top insurance markets to find the best coverage for each 3PL client. Graham Gonzales manages Reliance Partners’ non-insurance partnerships and is a licensed insurance agent for the modern 3PL.

Marketplace- Reliance Partners

Do You Need More Than Just Travel Insurance These Days? (Hint YES)

By John Gobbels
30-Year Health and Public Safety Expert / Chief Operating Officer of Medjet

Despite the current geopolitical tensions in Europe, and the emergence of BA.2 (the newest Omicron variant) in the news, many people will nonetheless be heading out on spring and summer travel abroad. If there’s one thing the pandemic taught us, it was the value of travel insurance, especially “Cancel for Any Reason” insurance (commonly known as CFAR) and medical coverage. But is additional travel protection necessary?

Air medical transport and travel security memberships have been receiving a lot of attention in the media lately, are they really worth the extra cost? For most travel experts, the answer is an emphatic “yes.”

Travel Insurance Has Limitations

Travel insurance is important. The best will cover a good chunk of money back should you not be able (or feel safe enough) to go on the trip. It will cover trip interruption (extra hotel nights if you get delayed, or test positive for your return), medical expenses should you become ill or have an accident, and medical evacuation should you require medevac to the nearest hospital capable of treating you. But even with the best policies, that’s likely where you’ll stay.

You should always read the fine print in your travel insurance plan because the medical coverage is always limited to some extent. Medical treatment costs are capped at a certain dollar amount, transfer by air ambulance to a hospital at home (“repatriation”) is typically only done if “medically necessary”, and “hospital of choice” is frequently misread as “hospital of choice at home” (but really only means hospital of choice in the city you’re currently in).

Membership in a medical transport program like Medjet is affordable, and gives travelers greater control over where they receive medical care. Getting moved to a hospital at home becomes your choice, not left up to an insurance company to determine whether the current facility is “adequate” or not, and whether moving you is “medically necessary”. As medical professionals, you also understand the importance of getting back into a system of care you trust, and back under the higher limits of your own health insurance coverage.

Should you incur treatment costs above covered limits, or desire services not covered, the financial responsibility lies with you alone. A serious injury can quickly turn into a serious out-of-pocket bill, and a single medical transport to get moved home can range from $30,000 (domestic) to $180,000 (international).

Compared to a $99 Medjet membership, you begin to see why so many experts recommend this additional protection.

Security Threats Abroad

While tensions in Europe obviously have travelers nervous, violent crime is also on the rise globally. The pandemic stressed many economies, but perhaps the hardest hit were countries whose economies relied heavily on tourism. Crime has always been present in tourist destinations, but since the pandemic the U.S. Department of State’s Travel Advisory system has shown elevated security warnings for many areas typically thought of as “very safe”.

Medjet’s elevated membership, MedjetHorizon, adds a 24/7 security response line benefit, with in-country response to a wide variety of safety threats: Terrorism, political threat, violent crime, disappearance, kidnap for ransom, natural disaster and more. While travel insurance may also cover some security evacuations, they typically wait for the government to officially issue a mandate to evacuate, which puts you in the same last-minute scramble to get out as everyone else. MedjetHorizon members have access to security responses any time they begin to feel threatened.

It’s Not Just For “Dangerous” Travel

Travelers often dismiss the idea of getting a supplemental travel protection because they aren’t planning excursions like cage diving with sharks or participating in events like Spain’s annual Running With the Bulls. The extra protection doesn’t seem necessary if they’re just sightseeing. In reality, unexpected injuries and emergencies can happen at any time, and to anyone, not just people who are going on potentially “dangerous excursions” or participating in extreme sports or activities. If those types of activities ARE in your travel agenda, again, read the limitations of your insurance policy because many won’t cover injuries sustained while doing them. Medjet has no “adventure travel” exclusions (and no pre-existing condition exclusions under age 75).

Accidents Happen Close to Home Too

An added bonus of being an annual Medjet member is that it covers domestic travel as well, any time you venture more than 150 miles from home. Most of our members buy our protection for the “big international trip” but many of our transports each year end up being for accidents like a slip and fall at a wedding, or a serious illness landing a member in a hospital just a few states away. Right now, we’re inundated with spring skiing accidents and summer will likely bring its typical heavy load of downed motorcycle transports. People don’t think about our program for domestic travel because most health insurance covers emergency treatment in other states. But it can be just as unsettling to be stuck in an unfamiliar hospital a few states away as it is to be stuck in one halfway around the world.


TIA members receive discounts on annual Medjet Memberships by using the link Medjet.com/TIA, or by calling 800-527-7478 and mentioning Transportation Intermediaries Association (TIA).


TIA is the premier organization for third-party logistics professionals in North America and abroad. Membership at TIA adds value to your business and provides resources for growth.
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