Freight Brokers Coverage Guide
Freight brokers don't drive trucks but get sued when loads are stolen, damaged, or misdelivered by the carriers they hire. FMCSA broker authority, surety bonds (BMC-84), and contingent cargo coverage are non-negotiable.
Critical Coverage
Professional Liability (E&O)
Covers claims of negligence or mistakes in professional services
What it covers
Cargo loss/damage claims when carriers you booked fail to deliver, contingent cargo liability, broker-vicarious liability for carrier negligence.
Common misconception
Brokers think 'we just connect shippers and carriers.' Plaintiffs' attorneys routinely allege negligent carrier selection, requiring brokers to demonstrate due diligence.
What it does NOT cover
Carrier's primary liability. Intentional acts.
The gap — what happens without it
Booked carrier loses a $90K shipment; broker is sued for negligent selection. Contingent cargo + broker E&O pays defense and settlement.
What drives your premium
Annual brokered revenue, cargo types, carrier vetting practices, claims
Endorsements to ask about
Contingent cargo coverage. Negligent-selection defense. FMCSA broker bond is separate (BMC-84 or BMC-85).
Cyber Liability
Covers data breaches, ransomware, and digital threats
What it covers
Breach response, ransomware, business email compromise (BEC) — freight brokers are top BEC targets due to high transaction volume.
Common misconception
Brokers handle massive wire transfers daily — BEC scams targeting freight brokers can siphon hundreds of thousands.
What it does NOT cover
Unencrypted devices. Voluntary disclosure of credentials.
The gap — what happens without it
BEC attack reroutes $140K in carrier payments to fraudster's account. Funds-transfer fraud coverage pays.
What drives your premium
TMS systems, MFA, transaction volume
Endorsements to ask about
Funds-transfer fraud / social engineering. Reputation/PR.
Important Coverage
General Liability
Covers third-party bodily injury and property damage claims
What it covers
Office premises, advertising injury.
Common misconception
Broker offices have low premises exposure but contracts require GL.
What it does NOT cover
Professional services. Cyber.
The gap — what happens without it
Visitor trips at office — $7K. GL pays.
What drives your premium
Office, employees
Endorsements to ask about
Hired/non-owned auto.
Situational Coverage
Employment Practices Liability (EPLI)
Covers wrongful termination, discrimination, and harassment claims
What it covers
Employment claims.
Common misconception
Mid-size brokers face routine employment exposure.
What it does NOT cover
Wage/hour.
The gap — what happens without it
Terminated dispatcher alleges discrimination — $40K. EPLI pays.
What drives your premium
Employees, state
Endorsements to ask about
Wage/hour.
Directors & Officers (D&O)
Covers personal liability of company leadership
What it covers
Officer liability where investors exist.
Common misconception
PE-backed brokers face investor disputes.
What it does NOT cover
Fraud.
The gap — what happens without it
Investor sues principals — D&O defends.
What drives your premium
Funding, claims
Endorsements to ask about
Entity coverage.
Not sure what you need?
Text us your trade and state — we'll tell you exactly what coverages apply to your business and shop the market for the best rate.