How Much Cargo Insurance Do I Need for Truckers?

Running a trucking company, you know the biggest responsibilities are keeping your drivers and the public safe and getting your client’s cargo where it’s going in one piece. Cargo insurance is important when running a successful trucking business.

The Federal Motor Carriers Safety Administration sets the standards for the trucking industry. The agency requires that you have $5000 of insurance for each vehicle and $10,000 for each occurrence if you carry household goods.

Although the FMCSA may not require it, any trucking company must have cargo insurance. When you Google “truck insurance Florida” you’ll see that any trucking company will need plenty of insurance. The amount and type of cargo insurance you need will depend on the type of cargo that you haul and the distance you’ll carry it.

What Clients Expect

When you receive new clients, you sign a contract with them. The contract will include specific details about the time your product will arrive at its destination and the amount of money you receive.

Any good contractor will absolve you of the blame for damage to cargo beyond your control. However, no manufacturer in their right mind will sign a contract without a clause that details the amount of cargo insurance a company has. They want to know who provides your insurance and the specific details of your policy.

You should be insured for the wholesale value of whatever you carry. When a cargo load doesn’t arrive at its destination, it affects not only your client but the retailer or warehouse that you’re taking it to.

If products don’t make it on time and in one piece, the warehouse may not get paid. They’ll also waste the space where it’s supposed to be stored. A retailer will lose the revenue they were counting on when a shipment doesn’t arrive or arrives late. Customers will be disappointed, and it may hurt a store’s reputation. If you’re transporting vital goods such as food or medicine, people may need it.

What Cargo Insurance Covers 

Cargo Liability insurance covers several expenses you may incur during a trip. Look for a company that covers you for anything that can go wrong during your trip. 


Products can be damaged in any number of ways. Your driver may get into an accident, spilling cargo all over the road, or they may roll over. A driver may forget to secure their cargo properly as they travel to their destination. 

If a truck isn’t insulated properly, cargo may sustain damage. This is especially true if you’re traveling through an area with inclement weather conditions.  

When a truck sustains physical damage due to the negligence of another driver, the other driver is responsible for paying for damages to the truck. It may be harder to prove that they’re responsible for the damage. They’re unlikely to have enough insurance to cover this damage even if they’re responsible. Your cargo insurance will cover you no matter who’s at fault. 

Most companies that transport cargo by truck will expect you to have between  $50,000 to $250,000 in cargo insurance. This varies by the type of cargo you’re carrying. For example, suppose you haul plastic novelties from Wyoming to Colorado. In that case, you’ll need considerably less insurance than if you haul gold jewelry from New York to Los Angeles.


There are some pretty sophisticated vehicles out there nowadays. Some of them have state-of-the-art equipment designed to prevent theft. Despite this, trucks are still burglarized and robbed. Some thieves steal from parked trucks. Fortunately, cargo insurance will help cover stolen items as well as damaged ones.

Earned Freight Coverage:

In some cases, cargo can be lost in transit. It may be delivered to the wrong place, or a driver may have readjusted their cargo in transit. Sometimes, your client may have failed to deliver all of their cargo to you without your noticing it. If a client claims you have lost their product, this insurance will cover your expenses.

Removal Costs

If your driver caused an accident and leaves cargo spilled all over the road, you will be responsible for cleaning it up. A good cargo insurance policy should cover the cost of this cleanup.

Refrigeration or Heating Breakdown

Does your company operate reefer trucks? If it does, you know much can go wrong with high-tech vehicles. A reefer truck can freeze over or stop cooling products altogether. If your products spoil when arriving at their destination, the retailer won’t be able to sell them. 

If you don’t realize that the cargo has been spoiled, people can get sick. Although your reefer truck insurance may cover damages to your truck and provide some cargo coverage, it’s better to have additional coverage.

If products must be kept warm and a heater fails, you’ll be responsible for paying for the damaged cargo. Unfortunately, this happens a lot with livestock.

Legal Expenses 

There are cases where a manufactures business may be harmed if their products don’t get where they’re going. If a company ends up losing a large amount of money or they go out of business because you’re unable to get its product to its destination, they may sue you.

Although a rare occurrence, a good cargo insurance policy will cover your legal expenses if you are sued. 

Are There Different Kinds Of Cargo Insurance?

There are several types of cargo insurance available to trucking companies. Your insurance agent can help you decide which policies are best for you.

Open Perils 

An open perils policy will cover damage done to cargo for any reason as long as that damage happens when it’s in your company’s care. This may sound like the best policy, no matter what. However, open policies will often have a list of exclusions. Some of the languages in these policies can be tricky.

Always read your policy very carefully to make sure what they’re excluding isn’t something that could easily happen. For example, if you haul products to the dock, you shouldn’t buy a policy that excludes water or crane damage. If you drive products through the desert, you shouldn’t buy a policy that excludes damage from heat.

Named Perils Policy 

A named perils policy covers you for specific dangers along the trip. Remember to review this kind of policy very carefully. If a certain type of damage isn’t listed, you won’t be able to recover damages for it. Be sure to make a list of everything you would like covered before you talk to an insurance agent.

Who Do I Buy My Insurance from?

Knowing where to get trucking insurance can be as important as knowing what kind of insurance to buy. Select a company that specializes in trucking insurance. A trucker needs much more insurance than an average vehicle, and there are far more things that can go wrong with a truck than with a regular vehicle.

Ask how long a trucking company has been in business before using their services. Choose a company that is well-established and has many clients who can vouch for them. They should have seen all of the different mishaps that can damage cargo.

Bundle your trucking insurance. Trucking companies need many policies, including liability insurance, bobtail insurance, general liability, and physical damage insurance. You will save plenty of money if you bundle your insurance with the same company,

Find an All Inclusive Company

When you run a trucking company, you will use many different kinds of service providers. You will need a company to handle FMCSA compliance, and you will need a company from which to buy insurance. You will also need someone to plan your routes and pay your taxes.

If you’re smart, you will find a company that can take care of more than one of these services. If you’re dealing with multiple companies, you will have multiple bills to pay and many different agencies to deal with. The more services one company provides, the better.

Although you may take every precaution to keep your products safe, accidents happen. Having great cargo insurance will help to pay for any emergencies and keep your company moving forward.

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