About Me

My photo
Nashville, Tennessee, United States
You can reach me at ben@gtu-ins.com. Comments are welcome.

Wednesday

Hanover Contingent Cargo Best Practices for Broker Carrier Agreements

Hanover has the best coverage in the marketplace- but like so many insurers they want their insureds to exhibit best practices so that losses can be averted and so they can keep their premiums low.  Part of those best practices is having the truck broker require better cargo coverage from their carriers.

That is done 2 ways:
  • by having a more explicit broker carrier contract
  • by requiring that insurance certificates spell out the terms of that contract.
We saw a great insurance provision in a broker carrier contract:

" Carrier shall procure and maintain at its sole cost or expense the following insurance coverages:

All Risk Broad Form Motor Truck Cargo Legal Liability Coverage in an amount not less that $100,000 per occurrence. The coverage provided under the policy shall have no exclusions or restrictions of any type that would forseeably preclude coverage relating to cargo claims including, but not limited to, exclusions for unattended or unattached trailers, theft, commodities transported under this Agreement, refrigeration breakdown or lack of refrigerator fuel."

This is about as good as you can do as a truck broker and you should require a certificate spelling out same.

Markel Broker Carrier Contract Best Practices for HazMat

More and more of our agents recognize the name of the game is for the truck broker to transfer as much insured risk down the supply chain as possible. That means two things:

1) Having a better broker carrier contract
2) Certifying the particulars of the broker carrier contract in an insurance certificate.

Markel is looking for truck brokers that exhibit best practices or are willing to exhibit best practices. Most truck brokers do not want to go to the trouble of changing their obsolete contract so you should help them to understand why they should.

For example, we occasionally write incidental haz-mat coverage. The drill with haz-mat is to know what limit is required by the DOT( $1 million or $5 million) and to certify that the carrier has the CA 9948.

What is the CA 9948? It's an ISO endorsement for Pollution Liability-Broadened Coverage for Covered Autos. As pollution is a much bigger exposure and is covered under the Markel Truck Broker Liability Form subject to the terms and conditions, they look to see that a haz mat carrier has sudden and accidental pollution liability coverage provided by the CA9948.

So the contract should state (obviously a lawyer should incorporate the wording) that if the carrier is hauling haz mat that they will have the necessary limits and also have the CA 9948 sudden and accidental coverage form attached and certify the same to the truck broker by insurance certificate.

That way, the broker has protected himself and Markel from being in a primary position for pollution loss.