The carrier's policy lapsed or was cancelled
The certificate looked fine at setup, but the policy was no longer in force on the day of the loss. The carrier's insurer owes nothing, and the shipper turns to the broker.
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Freight Broker Coverage
Contingent Cargo Insurance for Freight Brokers
When a load is lost or damaged, the shipper wants to be paid. If the motor carrier's cargo policy does not pay, the shipper often turns to the broker who arranged the load. Contingent cargo insurance is the broker's own policy for that moment.
This page explains what contingent cargo covers and what it does not, when it pays, what it costs, what the underwriter asks and how we place it. It is written for small freight brokers, including brokerages with a brand-new authority.
What contingent cargo insurance is, and what it is not
Contingent cargo insurance protects the freight broker. It responds when the motor carrier's own cargo policy does not pay a covered loss, and it pays under the contingent policy's own terms, not the carrier's. The word "contingent" means it depends on something else failing first. The insurer that pays the claim can then pursue the carrier for what it paid.
It is not primary cargo insurance. The carrier's motor truck cargo policy is the one that pays first when freight is damaged in its care. A broker that buys contingent cargo still needs every carrier it hires to carry its own cargo coverage, and still needs to check it before the load moves.
It is also not a federal requirement. The only federal financial requirement for a broker is the $75,000 BMC-84 bond or BMC-85 trust. Shippers and shipper contracts are what usually ask for contingent cargo. Our side-by-side of contingent cargo vs motor truck cargo shows the two policies next to each other, and the contingent cargo glossary entry gives the short definition.
When it pays: common reasons a carrier's cargo claim is denied
Contingent cargo comes into play when the carrier's claim does not get paid. These are common reasons that happens. Policy forms vary, so read your own form to see which of these it answers and under what conditions.
The commodity was excluded
Many cargo policies list freight they will not cover, or only cover named commodities. A load outside that list can be denied even with a valid policy.
The limit was too low
The carrier's cargo limit was lower than the value of the load. That leaves a gap above the limit, and the shipper may come to the broker for the difference.
A policy condition was not met
Common conditions include an unscheduled truck or trailer, an unattended vehicle, a refrigeration breakdown without the right endorsement, or a driver not on the policy. If the carrier did not meet the condition, the claim can be denied.
Contingent forms have their own exclusions and conditions too, and they vary. A common one is liability you took on by contract. If a shipper asks you to sign an agreement that makes you responsible like a carrier, show it to your agent before you sign, because the contingent policy may not cover that assumed liability. Our guide to what to do when a carrier's cargo claim is denied walks through the steps.
Contingent auto liability for truck brokers
When a carrier you hired is in a serious accident, the injured party may sue the broker too, often claiming the broker was careless in choosing that carrier. That is called a negligent selection claim.
Contingent auto liability protects the broker when that happens and the carrier's own auto liability does not respond or is used up, under the policy's terms. It does not replace the carrier's liability policy, and like contingent cargo it is not federally required. The two are often quoted together on one policy. Our page on contingent auto liability for freight brokers covers it in more depth.
What contingent cargo costs and how the premium is built
There is no standard price. The underwriter prices your brokerage from the application: what you move, how much a single load is worth, your revenue, your loss history and how you vet carriers. A specific commodity list and tight carrier vetting help. Vague answers and high-value loads push the price up.
The total you pay has more parts than the premium. Here is one 2026 quote for a small, new freight broker, shown as an example, not a typical price:
- Contingent auto liability premium: $4,250.
- Contingent motor truck cargo premium: $1,850.
- Policy premium: $6,100, a deposit premium, adjusted at the annual audit.
- Fees: a $1,000 carrier fee and a $500 wholesaler broker fee, both fully earned, which means not refunded.
- The state's surplus lines tax, about 5% in that state, plus a stamping fee.
- Total to start: about $7,972.
The policy is reported on gross receipts each month and audited at the end of the year, so the final premium follows the receipts you actually had. Two terms matter if you cancel early. That quote carried a 25% minimum earned premium, so at least a quarter of the premium is kept by the insurer even if you cancel in the first month. It also had no flat cancellation, which means you cannot cancel back to the start date for a full refund. The quote was valid for 30 days or until the proposed start date, whichever came first. Our contingent cargo insurance cost guide explains each line and what moves it.
What the underwriter asks on the freight broker application
Contingent cargo is quoted from a written application, not a phone call. These are the questions on the freight broker application we used in 2026. Having the answers ready is the fastest way to a quote.
| Topic | What the application asks |
|---|---|
| Revenue | Gross receipts for the past year, the current year and a forecast for next year. |
| Commodities | What you broker, by percent. "General freight" or "freight of all kinds" is not accepted. Be specific. |
| Volume and values | Loads brokered in the last 12 months, and the maximum and average value of any one shipment. |
| Special operations | Yes or no on hazmat, oversize or overweight, refrigerated, passengers, loads outside the US and Canada, final mile or white glove, household moving, warehousing, installation and autos. |
| Re-brokering | Whether you use other brokers, whether other brokers use you, and for what percent of loads. |
| Carrier-like conduct | Whether you are listed as carrier on the bill of lading, assign driver routes, sign shipper contracts that assume carrier-like liability, control or fine carriers, or handle payment of consignments. |
| Carrier vetting | Whether you keep a signed broker-carrier agreement, the carrier's operating authority and a certificate for all lines on file before a load is assigned, and review them each year. Whether you use only carriers rated Satisfactory or unrated by FMCSA, and reject insurers rated below A- by AM Best and auto liability under $1,000,000. |
| Affiliated carriers | Any motor carriers you own or share ownership with, and the percent of revenue brokered to them. |
| Claims history | Three years of loss runs if you were insured before, claims and known circumstances in three years, and any non-renewal, cancellation or decline in five years. |
| New business | The owner's experience if the brokerage is new, and your BMC-84 bond number. |
| General liability | A short supplement about your office, home office or warehouse and any loading at your location. |
Read the carrier vetting questions twice. Our page on broker carrier setup documents shows what a carrier packet contains.
How we place contingent cargo
Contingent cargo and contingent auto liability for freight brokers are written on the surplus lines, or non-admitted, market. We place them with Lloyd's of London underwriters through a surplus lines wholesaler. Full Coverage is licensed in every state but AK, HI and MA.
- Quoted by email from your written application. There is no online rater, so the quote is not instant.
- A brand-new brokerage can be quoted. The application asks for the owner's experience instead of loss history.
- Billing runs through our agency, and premium financing is available.
- We write the BMC-84 bond ourselves and we place broker E&O too, so the bond, contingent coverage and E&O can come from one agency.
See the full broker program on our freight broker insurance page, and read about the bond itself in our surety bond entry.
How to get a contingent cargo quote
Six steps from first contact to a policy in force.
- 1.Fill out the freight broker application. We send it with samples of the two documents brokers most often lack: a broker-carrier agreement and an owner experience letter.
- 2.List your commodities by percent and your largest single shipment value. These two answers drive the price more than anything else on the form.
- 3.Attach three years of loss runs if you were insured before. If the brokerage is new, attach the owner experience letter instead.
- 4.We send the full submission to the underwriter by email. There is no online rater, so expect a written quote, not an instant price.
- 5.Review the quote with us: premium, fees, tax, minimum earned premium, limits and the form's conditions. Ask about financing if you want to spread the payment.
- 6.Tell us in writing which quote to bind and the start date. We confirm coverage and issue certificates to your shippers.
Start with the quote request form. We reply with the application and the two sample documents.
Frequently asked questions
What is contingent cargo insurance?
Contingent cargo insurance protects a freight broker when the motor carrier's own cargo policy does not pay for a covered loss. It responds after the carrier's coverage fails, for example because the policy lapsed or the commodity was excluded, and it pays under the contingent policy's own terms. It covers the broker, not the carrier.
Is contingent cargo insurance required for freight brokers?
No. The only federal requirement for a freight broker is the $75,000 BMC-84 surety bond or BMC-85 trust. Contingent cargo is not federally required, but many shippers and shipper contracts ask brokers to carry it.
How much does contingent cargo insurance cost for a freight broker?
The price depends on your commodities, shipment values, revenue, loss history and how you vet carriers. In one 2026 quote for a small, new freight broker, contingent cargo was $1,850 of a $6,100 policy premium that also included contingent auto liability, before fees and surplus lines tax. Fees and a minimum earned premium apply, so read the whole quote, not just the premium.
What is the difference between contingent cargo and motor truck cargo insurance?
Motor truck cargo is the carrier's own primary policy and pays first when freight is damaged or lost in its care. Contingent cargo is the broker's policy and only responds when the carrier's cargo policy does not pay a covered loss. A broker that holds contingent cargo still needs its carriers to carry their own cargo coverage.
Can a new freight broker get contingent cargo insurance?
Yes. A brand-new brokerage can be quoted, and the application asks for the owner's experience instead of loss history. Expect the underwriter to read your commodity list and carrier vetting answers closely.
Who writes contingent cargo insurance for freight brokers?
Contingent cargo for freight brokers is usually written on the surplus lines, or non-admitted, market. We place it with Lloyd's of London underwriters through a surplus lines wholesaler, quoted by email from a written freight broker application.
Related resources
Get your brokerage quoted
Send us your MC number. We send the freight broker application and samples, submit it for contingent cargo and contingent auto liability, and quote the BMC-84 bond and broker E&O alongside it.