A new set of policy forms is now available to insurers that write motor truck cargo insurance to cover cargo exposures of transportation brokers who subcontract with motor carriers to make shipments.
The new “Contingent Cargo Coverage” forms are available in the Motor Truck Cargo section of the Inland Marine Guide, a resource of policy forms, rating procedures, underwriting guidelines, and other information for the traditionally nonfiled classes of inland marine insurance.
The Guide is produced by the American Association of Insurance Services, a national advisory organization that develops standardized policy forms and rating information used by more than 600 property/casualty companies throughout the U.S.
The new Contingent Cargo Coverage base form covers an insured broker for its subcontractor’s legal liability as a common or contract carrier.
Insured cargo is covered while in “due course of transit,” including loading and unloading, and while at terminal locations. Coverage is provided only if the insured is unable to collect the amount of a loss from its subcontractor or the subcontractor’s insurer. Coverage for defense costs is provided as a coverage extension.
Several endorsements are provided which are analogous to those provided for direct coverage of motor carriers, but modified to be suitable for transportation brokers. They include a named perils endorsement, refrigeration breakdown coverage, a reporting conditions endorsement, and exclusions for parked trailers, specified property, unattended vehicles, and theft. (An endorsement for providing limited theft coverage is also available.)
The new forms, endorsements, and schedules are available for use in most states. In states that do not exempt motor truck cargo forms from filing requirements, the forms will be filed with a proposed effective date of January 1, 2010.
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