A Brief Overview of Contingent Cargo Insurance
Contingent cargo covers goods in vehicles that are the legal liability of insureds (usually freight brokers) and their carriers. “Contingent” means it is not primary coverage and will only kick in if the carrier’s general cargo policy doesn’t pay out (because of policy cancellation, insufficient limits, loss or damage exclusions, etc.).
One of the biggest benefits of contingent cargo insurance is the due diligence brokers perform before issuing coverage. To ensure the policy will successfully protect the broker and shipper in a cargo claim, brokers follow a “best practices” system to vet the carrier—including its liability insurance, authority, safety programs, etc. Brokers do their homework to confirm your carrier has the proper credentials and your second layer of coverage will be effective.