Understanding Motor Truck Cargo Insurance—An Overview

Overview: Motor truck cargo (MTC) liability insurance is intended to provide legal liability coverage for truckers (common or contract carriers) while they are transporting property of others (cargo). Under this coverage the insured is the trucker and the covered property is the property of others that is being transported by the insured. The trucker is liable for cargo under the terms of a bill of lading (common carrier) or a contract with the shipper (contract carrier). The legal liability imposed on these two types of motor carriers differs in extent. Generally, a common carrier is responsible for the safe delivery of the goods it is transporting and thus owes a very high degree of care. This level of legal liability can be referred to as “strict liability” or liability. The U.S. Code (49 USC 13906) requires motor carriers of cargo operating within federal jurisdiction to show evidence of cargo liability insurance with minimum limits of $5,000 for loss or damage to the contents of any one vehicle, and $10,000 for aggregate losses or damage at any one time and place. Self-insurance is permitted for carriers that have the appropriate level of financial stability. Although there are no filed policy forms for motor truck cargo liability insurance, most insurers that write this coverage maintain a standard form for issuing policies. This form can be modified by endorsement to fit the needs of a particular insured. Advisory non-filed forms for this class of business are available from AAIS and ISO.

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Format: PDF | Size: 1,137KB | Date: Jan 2003 | Pages: 3