Contingent cargo liability insurance is a supplemental insurance policy that protects freight brokers in the event of the damage or loss of a shipment. While freight brokers are merely middlemen who negotiate the shipping contracts between the owners of the goods and the receiver of the goods, brokers can be liable if anything happens to the goods during shipment. In the event of losses or damages, the owner of the goods often turns to their own insurance policy to cover the losses, but if that fails, the owner usually demands payment from the freight broker.
Freight brokers don’t have to have contingent cargo liability insurance, but many shipping firms refuse to deal with brokers who don’t have this type of policy. Among the things the standard contingent cargo liability policy covers are losses from cargo that was abandoned to save a storm-tossed ship, losses from a ship sinking or train wrecks, losses from damages or if the goods are stolen. No matter how far the goods are being shipped, the benefits of contingent cargo insurance to freight brokers are numerous. With the amount of cargo shipped overseas increasing every day, having the right insurance coverage can mean the difference between a successful freight brokerage business and one driven to bankruptcy by lawsuits.