cargo insurance

Contingent Cargo Policy vs. Primary Cargo Policy

Often, the details of the broker’s cargo insurance are overlooked. It’s essential to understand how your broker’s insurance works and who ultimately benefits. In this article, we’ll break down contingent cargo insurance and primary cargo insurance, including what each cover.


Contingent Cargo Policy

Typically, brokers use contingent cargo coverage. This insurance policy is “contingent” upon the carrier’s insurance. While the carrier may have coverage, you likely won’t know the quality of that coverage.

Suppose the carrier’s insurance denies the cargo claim for whatever reason. In that case, the contingent cargo policy also does and, your policy becomes worth less than the paper it was written on, and your company loses money.

Bottom line: When you rely on contingent insurance, you’re taking the risk of having little to no coverage.


Primary Cargo Policy

On the other hand, freight brokerage insurance has evolved over the past few years. There is now a first dollar cargo insurance available, Primary Motor Truck Cargo, based on legal liability. First dollar coverage is an insurance policy where the insurer assumes payment once an insurable event occurs. It can cover a much more comprehensive range of cargo claims, such as broken seal coverage, which a contingent coverage policy rarely covers.

Is this type of insurance more expensive? Yes, however, the cost is necessary to get more premium and cover everything contingent cargo policies can deny.

Bottom line: Primary cargo policy covers you directly, unlike a contingent policy based on the carrier’s insurance.


Your Responsibility as the Shipper

It is ultimately the shipper’s responsibility to confirm shipment insurance. You want to be sure you know what your cargo insurance provides and what it does not. 

NEVER assume you are fully covered. Ask questions when working with your partner. Get your covered amounts in writing, even if it’s as simple as an email. 

Do not assume that your logistics provider knows the value of all of your shipments. Talk to your partner about the value of your shipment and about covering it for a specific dollar amount. 

If your shipping partner does not ask you about the value of your shipment, then they’re not doing their due diligence.


Ship With SiLo

If you feel like your partner has missed out on your shipment details, it could cost you a lot in the long run. At SiLo, we confirm these details proactively to protect your shipment against loss. Additionally, the difficulty of getting a payment for a claim is something we regularly vet.

SiLo has both an A-Rated Contingent Auto Liability Policy and A-Rated Primary Cargo. We deliver strategic solutions specifically tailored to optimize and protect your business logistics so that you can feel confident throughout the entire process. It’s simple. SiLo covers you.

If you are curious about the safety of your shipment, contact us.

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