Freight broker insurance

The standard insurance stack

A working freight broker carries six standard lines of coverage. Each one responds to a different category of loss. Skipping any of them creates a gap somewhere; skipping contingent auto liability after Montgomery v. Caribe creates a gap large enough to wipe out the business.

1. BMC-84 surety bond ($75,000)

Federally required by FMCSA for every freight broker. The bond is a payment guarantee, not insurance. It responds to claims from carriers that the broker failed to pay or from shippers whose cargo claims the broker failed to honor. The annual premium runs $1,000-$10,000 depending on credit. The bond is the price of admission; without it, you cannot legally operate.

2. Contingent auto liability ($1M-$5M typical)

Third-party bodily injury and property damage coverage that responds when a motor carrier's primary auto policy fails. Critical line of coverage post Montgomery v. Caribe Transport because this is what actually pays a negligent-hiring judgment. Sales-led, varies materially by load mix and broker size. Typical annual premium for a small broker at $1M limit: $3,000-$8,000.

3. Contingent cargo ($100K-$500K typical)

Cargo loss coverage that responds when a carrier's cargo policy fails or is insufficient. Less catastrophic exposure than bodily injury but high-frequency. Brokers running high-value or refrigerated loads should consider higher limits or per-load excess endorsements.

4. General liability ($1M typical)

Standard commercial general liability covering bodily injury and property damage at the broker's premises and from operations not involving the truck. Required by most shipper contracts. Annual premium $500-$1,500 for a small broker.

5. Errors and omissions (E&O)

Covers operational errors that cost a shipper or carrier money: misrouted loads, billing errors, miscommunication. Not strictly required but increasingly expected by larger shippers and underwriters.

6. Cyber liability ($1M typical)

Covers email fraud, wire-transfer fraud, and data-breach response. Freight broker wire fraud has become a meaningful category of loss in recent years. $1M coverage is inexpensive relative to the exposure.

How the lines interact

The lines are not redundant; each responds to a different category of claim. The standard sequence in a bodily-injury scenario:

1. A motor carrier's truck is involved in a crash that injures or kills a third party.
2. The carrier's primary auto liability pays first up to its limit (typically $750K-$1M for general freight).
3. The injured party's damages exceed the carrier's coverage and the plaintiff's lawyer pursues the broker on a negligent-hiring theory.
4. The broker's contingent auto liability responds. The broker bond does not (different category of obligation).
5. If the broker's contingent auto limit is exhausted, any excess layers respond next. Past that, the broker is personally exposed.

The arithmetic is brutal. The median trucking verdict is approximately $36 million. The carrier's primary often runs $1M. The broker's contingent auto often runs $1M-$5M. The gap between $36M and the available coverage is the broker's balance sheet, unless excess layers or contractual indemnification close it.

What underwriters now look for

The contingent auto liability market tightened materially in 2024 and 2025 following nuclear verdicts against brokers. Post Montgomery, the entire market is repricing. Underwriters evaluate the following, roughly in this order:

1. Years in business. New brokers under 18 months face a smaller market and higher rates.
2. Annual loads and revenue. Bigger book = more exposure = higher premium, but also signals operational maturity.
3. Load mix. Hazmat, oversize, refrigerated, high-value carry material premium loads. General dry-van freight is the most favorable class.
4. Documented carrier vetting process. Now functionally a yes/no underwriting question. Brokers who can produce a written process document and demonstrate per-load capture get materially better rates than brokers who cannot.
5. Loss history. Five years of loss runs. Pattern matters more than single events.
6. Customer mix. Enterprise shipper concentration vs long-tail diversification.
7. Carrier contract terms. Indemnification, additional-insured requirements, minimum carrier limits, no-double-brokering clause.

Where to buy each line

Brokers do not typically buy these direct from carriers. The market runs through wholesalers and managing general agents specialized in transportation:

• Amwins. Largest transportation wholesaler; access to most carriers writing contingent auto.
• Roanoke Insurance Group. Specialist in broker and 3PL risks. Strong on bond plus contingent auto packages.
• R.E. Garrison Insurance. Mid-market broker and 3PL focus.
• Marquee Insurance Group. Transportation specialty wholesaler.
• RPS (Risk Placement Services). Broad wholesaler with transportation desk.

Your independent insurance agent reaches into one or more wholesalers on your behalf. Use an agent with an active transportation book; the difference in market access between an agent who knows transportation and one who is learning is material.

The relationship between insurance and documentation

Insurance and documentation are complementary. The insurance pays the claim. The documentation shapes what the claim looks like.

A broker with $5M in contingent auto and no documented vetting is in worse shape than the policy limit suggests. The insurer may issue a coverage opinion with reservation of rights. The defense lawyer fights two battles simultaneously: the underlying claim and the coverage question. Settlements come later and at higher numbers.

A broker with $5M in contingent auto and a tamper-proof per- load vetting record is in a fundamentally different category. The insurer defends without reservation. The defense lawyer fights one battle. Plaintiff's counsel sees a defendant who can produce contemporaneous evidence of reasonable care and adjusts demand expectations.

Underwriters know this. They reward brokers who can document their process with better rates. They charge brokers who cannot more, or decline coverage entirely.

The full small-broker insurance stack: typical cost

• BMC-84 bond: $1,000-$10,000/year
• General liability ($1M): $500-$1,500/year
• Contingent auto liability ($1M): $3,000-$8,000/year
• Contingent cargo ($100K): $500-$1,500/year
• E&O: $500-$2,000/year
• Cyber ($1M): $500-$1,500/year
• Annual total: ~$6,000-$24,500

For brokers regularly running hazmat or high-value loads, add excess layers and pollution coverage; total can run materially higher. The vetting documentation tool (~$1,200/year for VettedHaul Defender) is a small line item relative to the insurance stack and pays back through better underwriting results.

The bottom line

Freight broker insurance is a six-line stack with one line (contingent auto liability) that moved from optional to required-in-practice in May 2026. The bond is not insurance. The verdict math is brutal. The underwriting market rewards documented vetting. The combination of appropriate limits plus defensible documentation is what produces survivable outcomes when claims arrive.