Contingent auto liability insurance

Contingent auto liability is third-party bodily injury and property damage coverage that responds when a motor carrier's primary auto policy fails to pay a claim arising from a load arranged by the broker.

The policy is contingent on the carrier's primary coverage failing, lapsing, being denied, or being exhausted. It covers the broker's liability arising from the carrier's operation of the truck. It does not cover vehicles the broker owns; those need separate primary auto.

Standard limits for small and mid-size brokers run $1M to $5M single-occurrence, with $10M+ available via excess layers. Premium varies materially by load mix, broker size, and underwriting profile.

Why this matters for freight brokers

Post Montgomery v. Caribe Transport, contingent auto is the line of coverage that actually responds to a negligent-hiring judgment against the broker. The federal broker bond does not. Without contingent auto, the broker is personally exposed for the entire verdict above the carrier's primary limit.

Related terms

• Contingent cargo insurance — Contingent cargo is insurance that responds when a motor carrier's cargo coverage fails to make a shipper whole for cargo loss or damage on a load arranged by the broker.
• Broker bond ($75,000 federal surety) — The freight broker bond is the $75,000 federal financial responsibility requirement FMCSA mandates for every property broker, satisfied via BMC-84 surety bond or BMC-85 trust fund.
• Negligent hiring (broker liability theory) — Negligent hiring in the broker context is a state-law tort claim alleging that a freight broker selected a motor carrier the broker knew or should have known was unsafe.
• FAAAA (Federal Aviation Administration Authorization Act of 1994) — The FAAAA is the 1994 federal statute that historically preempted most state-law claims related to a freight broker's prices, routes, or services, until the Supreme Court's 2026 Montgomery v. Caribe Transport ruling carved out negligent-hiring claims under a safety exception.