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What is Cargo Insurance?

Motor carriers purchase insurance in case of a loss for the transportation of truck cargo that s been transferred into their care, custody and control. The limits for motor truck cargo insurance are determined by the type and value of the freight that s transported, and should be tailored to your specific trucking operation by an expert in the field of trucking insurance. This type of policy should be carefully considered prior to purchase; under-insuring the cargo can negatively impact a trucking operation in the event of a major loss. The responsibility of the transporter, and the value of the load should be established and mutually agreed upon prior to shipping.

The U.S. Department of Transportation Code 49 USC 1390 states that drivers operating within federal jurisdiction has to show proof of cargo insurance with a minimum of $5,000 for damage or loss of contents and $10,000 for aggregated damage or loss.

Code 40 USC 13906 as outlined by the U.S. Department of Transportation:

13906. Security of motor carriers, brokers, and freight forwarders

(a) Motor carrier requirements-

(1) Liability insurance requirement- The Secretary may register a motor carrier under section 13902 only if the registrant files with the Secretary a bond, insurance policy, or other type of security approved by the Secretary, in an amount not less than such amount as the Secretary prescribes. A registration remains in effect only as long as the registrant continues to satisfy the security requirements of

this paragraph.

(3) Transportation insurance- The Secretary may require a registered motor carrier to file with the Secretary a type of security sufficient to pay a shipper or consignee for damage to property of the shipper or consignee placed in the possession of the motor carrier as the result of transportation provided under this part. A carrier required by law to pay a shipper or consignee for loss, damage, or default for which a connecting motor carrier is responsible is subrogated, to the extent of the amount paid, to the rights of the shipper or consignee under any such security.

(c) Freight forwarder requirements-

(1) Liability insurance- The Secretary may register a person as a freight

forwarder under section 13903 of this title only if the person files with the Secretary a bond, insurance policy, or other type of security approved by the Secretary.

(2) Freight forwarder insurance- The Secretary may require a registered

freight forwarder to file with the Secretary a bond, insurance policy, or other type of security approved by the Secretary sufficient to pay, not more than the amount of the security, for loss of, or damage to, property for which the freight forwarder provides service.

(3) Effective period- The freight forwarder s registration remains in effect only as long as the freight forwarder continues to satisfy the security requirements of this subsection.





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