Contingent auto liability for freight brokers: what it covers and what to ask for

May 20, 2026 · 11 min read

TL;DR

Contingent auto liability is the insurance policy that responds when a carrier's primary auto coverage fails to pay a third-party injury claim. Post Montgomery v. Caribe Transport, every freight broker needs it. Limits of $1M to $5M are standard for small-to-mid brokers. Underwriters increasingly require documented carrier vetting to write the policy. Here is how it works, what to ask for, and what to have ready when you call your agent.

What contingent auto liability actually is

Contingent auto liability is a third-party bodily injury and property damage policy that sits behind the motor carrier's primary auto liability. It responds when the carrier's policy fails to pay, either because the policy lapsed, the limits are exhausted, the insurer denies coverage, or the carrier was operating outside the scope of their policy at the time of the loss.

Two things to be clear about up front. First, contingent auto is not excess of the broker's own auto policy. It is contingent on the carrier's policy failing. Second, contingent auto covers the broker's liability arising out of the carrier's operation of the truck. It is not coverage for a vehicle the broker owns. Brokers do not own the trucks; that is the entire point of the brokerage model.

Why this matters more now than it did a month ago

Before May 14, 2026, brokers in most circuits had a strong federal preemption defense to negligent-hiring claims under the FAAAA. The defense was not bulletproof, but it was good enough that many small and mid-size brokers ran without contingent auto coverage and never had a problem.

Montgomery v. Caribe Transport II ended that. The Supreme Court unanimously held that the FAAAA does not preempt state-law negligent hiring claims against brokers. Brokers can now be sued in state court for selecting unsafe carriers, and the financial exposure is large. Median trucking verdicts run in the tens of millions. The broker's $75,000 federal surety bond does not respond to bodily injury judgments.

Contingent auto liability is the line of coverage that fills that gap. If you do not carry it today, your insurance broker should be the next call you make.

What contingent auto covers (and what it doesn't)

Coverage varies by policy form, but the core grant is bodily injury and property damage to a third party arising out of the transportation of property by a motor carrier you arranged. Most policies sit excess over the carrier's required minimum ($750,000 federal, often $1M contractual) and respond when that underlying coverage is unavailable or insufficient.

Standard exclusions to watch for in the policy form:

Owned auto. Contingent does not cover your own fleet. Brokers running owned trucks need separate primary auto on those vehicles.
Cargo. Contingent cargo is a separate line. Many brokers buy both, often from the same insurer. Do not assume contingent auto includes cargo.
Intentional acts. Standard. Not relevant in a negligent-hiring fact pattern.
Pollution. Standard, sometimes negotiable up to a sub-limit.
War, nuclear, terrorism. Standard.

Pay particular attention to how the policy defines "underlying coverage" and what triggers the contingent grant. Some policies require formal denial in writing from the carrier's primary insurer before they will pay. That can take weeks or months. Others allow the broker to tender defense earlier on a reservation of rights basis. Ask your agent which form you are buying.

Coverage limits: what to actually ask for

The right limit depends on your load mix, customer requirements, and risk appetite. Some practical anchors:

$1M single-occurrence. Bare-minimum starting point for any broker. Many small brokers carry this and nothing more. It does not cover a catastrophic verdict, but it covers most claims and shifts your litigation posture from uninsured to insured. Most contracts with shippers also require at least $1M.
$5M single-occurrence. The sweet spot for mid-size brokers and for any broker hauling for shippers with high-value cargo or premium-brand reputational risk. Affordable in the current market for brokers who can document their vetting process.
$10M+ via excess layers. For brokers with significant load volume, hazmat exposure, or sophisticated enterprise shippers who require it contractually. Built as a primary contingent ($5M) plus excess layers on top.
Aggregate limits. Most policies have an annual aggregate of 2x to 3x the per-occurrence limit. If you have multiple claims in a year, aggregate erodes faster than you expect. Ask the question.

A common mistake is to buy the lowest limit that satisfies a single shipper contract. The contract is the floor, not the ceiling. Your exposure is to anyone injured on the highway, not just to the shipper.

How underwriters actually evaluate brokers

The market for contingent auto liability tightened materially in 2024 and 2025 following a string of nuclear verdicts against brokers. Underwriters are now writing fewer policies, raising rates, and asking more questions. Post Montgomery, the entire market expects another reset.

What a contingent auto underwriter wants to see, in roughly the order they will ask:

Years in business. New brokers (under 18 months) face a smaller market and higher rates.
Annual loads and revenue. Bigger book of business equals more exposure equals higher premium, but also shows operational maturity.
Load mix. Hazmat, refrigerated, oversized, and high-value loads carry materially higher rates. General dry-van freight is the most favorable class.
Documented carrier vetting process. This is increasingly a yes/no underwriting question. "Do you check FMCSA safety rating, CSA scores, insurance currency, and operating authority before booking? Can you document it?" Brokers who can answer yes with a written process get better rates. Brokers who cannot get declined or pay a heavy load on the premium.
Loss history. Five years of loss runs is standard. Zero claims is great. A single small claim is fine if you can show what you changed. A pattern is hard.
Customer mix. Brokers serving a few large enterprise shippers are scored differently than brokers with a long tail of small shippers. Both are insurable; the analysis differs.
Carrier contract. Underwriters want to see indemnification, additional-insured requirements, minimum carrier limits, and a no-double-brokering clause in the broker-carrier agreement. A weak carrier contract is a red flag.

What to have ready before you call your agent

If your application is well-prepared, you get better quotes faster and from more carriers. Have these documents and answers on hand:

Acord application (your agent will send the form; do not guess your way through it)
Five years of loss runs from any current or prior insurer
Current contingent auto and contingent cargo declarations, if you have them
Annual gross revenue and load count for the past three years
Load mix breakdown: dry van, reefer, flatbed, hazmat, oversize, intermodal, drayage — by percentage of loads
Top 10 shippers by volume, with annual load counts
Your standard broker-carrier agreement (the actual document)
A written description of your carrier vetting process. One page. What you check before booking, how you document it, how often you re-check, what disqualifies a carrier

The vetting process document is where most brokers fall down. They do the work but cannot describe it. Write it down. One page, plain language, list of checks. If you do not have one, the process of writing it will probably tighten what you actually do.

The interplay with carrier vetting

Contingent auto and documented carrier vetting are not separate risk-management strategies. They are two halves of the same play.

The insurance pays the claim. The documented vetting is what keeps the insurer in your corner during the litigation. A broker who carries $5M in contingent auto but cannot produce vetting records is in worse shape than they think. The insurer may reserve rights or seek subrogation. The defense lawyer is fighting two battles: the underlying claim and the coverage question.

A broker who carries $5M in contingent auto AND can produce a per-load, per-carrier vetting record signed and timestamped at booking is in a fundamentally different category. The insurer defends without reservation. The defense lawyer fights only the underlying claim. The plaintiff sees a case with documented reasonable care and a defendant who is going to put up a fight. Settlements come faster and at lower numbers.

Where to actually buy it

Brokers do not typically buy contingent auto liability direct from a carrier. The market goes through wholesale brokers and managing general agents who specialize in transportation. The names that come up most often in 2026:

Amwins. Large wholesaler with deep transportation expertise and access to most carriers writing contingent auto.
Roanoke Insurance Group. Specialist in freight broker and 3PL risks. Strong on the bond plus contingent package.
R.E. Garrison Insurance. Mid-market broker and 3PL focus.
Marquee Insurance Group. Wholesaler with transportation specialty.
RPS (Risk Placement Services). Broad wholesaler with transportation desk.

Your local independent insurance agent will reach into one or more of these wholesalers. You do not call them directly. Start with an independent agent who has a transportation book; if your current agent does not, find one who does. The difference in quotes between an agent who knows the market and one who is learning on your dollar is significant.

The bottom line

Contingent auto liability is no longer optional for any active freight broker. The federal preemption defense that made it skippable is gone. The exposure is real, the math is brutal, and the underwriting market is asking the right questions.

Two actions to take this week. Call your insurance agent and get a quote, or get an updated quote if you are already insured. Pull together the application packet listed above, especially the one-page carrier vetting process document. Brokers who do both will end up paying less, getting better limits, and sleeping better.

VettedHaul builds the documented carrier vetting record that underwriters are asking for and that survives in litigation. Per-load, per-carrier, signed and timestamped, exportable on demand. Join the waitlist to lock in founding-customer pricing.