What is Contingent Motor Truck Cargo Insurance?

Contingent cargo insurance is a type of coverage designed to protect transportation intermediaries, such as third-party logistics providers, property brokers, and other forwarders who do not issue bills of lading or have custody of cargo, from the financial responsibility of cargo loss or damage during transit.

Cargo liability coverage is there to protect the actual cargo carriers or entities that present themselves as the carrier such as an FMCSA licensed domestic freight forwarder. Contingent cargo legal liability insurance defends the logistics service provider who does not present as a carrier. Contingent insurance steps in when the carrier’s cargo legal liability insurance fails to respond to the loss, and the logistics service provider is drawn into a claim.

Contingent motor truck cargo insurance typically covers the following:

  • The cost of defending against a cargo claim, including legal fees and expert witness fees.
  • The cost of settling a cargo claim, including the amount of the settlement itself and any associated fees.
  • The cost of pursuing recovery from third parties who may be responsible for the cargo loss or damage.

Contingent cargo is an important safeguard for transportation intermediaries. It can provide legal defense and protect them from any financial responsibilities a court may issue against them in the case that the carrier’s insurance does not respond. Since most cargo claims can be expensive, especially high-value shipments, it’s a crucial layer of protection.

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