Freight insurance pays for loss or damage to goods in transit. A carrier is liable for actual loss under federal law, but a contract can limit it. A broker's $75,000 bond isn't cargo insurance, and FMCSA's $750,000 minimum for most for-hire carriers is public liability coverage, not a cargo policy.
Who is responsible for your freight?
Three different protections get confused, and only one of them pays for damaged cargo.
| Protection | Who has it | What it covers |
|---|---|---|
| Carrier liability (Carmack Amendment) | The carrier hauling the load | The actual loss or injury to the property it hauls, subject to the contract terms |
| Public liability insurance ($750,000 minimum) | For-hire carriers of nonhazardous property with a vehicle of 10,001 pounds or more | A federal financial responsibility minimum for liability, not a cargo policy |
| Broker surety bond or trust fund ($75,000) | Freight brokers | Payments to shippers or carriers if the broker fails to carry out its contracts |
| Cargo insurance | Carrier or shipper, if bought | Loss or damage to goods, up to the policy limit and subject to its exclusions |
The $750,000 figure comes from 49 CFR 387.9, which sets minimum financial responsibility levels. The carrier liability rule is in 49 U.S.C. 14706. We explain the bond in our BMC-84 guide.
Why carrier liability may not be enough
The carrier is liable for actual loss, but the bill of lading and the carrier's tariff can set limits on what it pays per shipment or per pound. Read those terms before you ship valuable freight. If the limit is lower than what the goods are worth, you either declare a higher value where the carrier allows it or buy separate cargo insurance for the difference.
What to ask before you rely on a policy
Ask for the certificate of insurance and confirm it directly. FMCSA warns that even insurance certificates can be forged, so contact the insurer or agent listed rather than trusting a PDF. FMCSA's page on broker and carrier fraud explains what to check.
Ask about the cargo limit and the deductible. A policy that tops out below your load value doesn't protect you.
Ask what's excluded. Every policy has exclusions, and temperature-controlled loads, high-value goods and theft are where they tend to matter most.
Ask who the policy covers. A carrier's policy protects the carrier's liability. Your own policy covers your goods.
What FMCSA requires carriers to file
Under 49 CFR 387.301, a for-hire motor carrier can't operate in interstate commerce unless FMCSA has accepted a surety bond, certificate of insurance or other security for public liability, in the amounts the rules set. The minimums are in 387.9, and they vary by what the carrier hauls. For general nonhazardous freight in a vehicle of 10,001 pounds or more, it's $750,000. For oil and many hazardous materials in that size range it's $1,000,000, and for certain hazardous substances hauled in bulk it's $5,000,000.
The same section has a separate cargo insurance requirement for household goods carriers. For general freight, cargo coverage comes from the carrier's own policy and your contract, which is why it's worth asking about.
Freight that needs extra attention
Some loads carry more risk than a standard dry van shipment. Temperature-controlled freight can be lost to equipment problems, so read the policy for reefer exclusions and see our guide to temperature-controlled freight. High-value freight is a target for theft, which we cover in cargo theft in trucking. And fragile freight depends heavily on packing, so check what the policy says about packaging.
A checklist before you tender freight
Know the value. Work out what the load is worth, replacement cost included, and compare it with the carrier's liability limit.
Read the bill of lading and tariff limits. Look for per-shipment or per-pound caps and the process to declare a higher value.
Get the certificate and verify it. Contact the insurer or agent directly, as FMCSA advises.
Decide on your own coverage. If the gap is meaningful, price a separate cargo policy before the load moves, not after.
Keep the paperwork. Save the bill of lading, delivery receipt, photos and invoice, because a claim depends on them.
If your freight is damaged
Document the damage at delivery, then file a written claim with the carrier within the time limit. Our guide to how freight claims work lists the deadlines and what the claim must say.
Freight insurance questions
Does my carrier's insurance cover my cargo?
Not automatically. A carrier is liable for the actual loss to your freight, but its liability can be limited by contract, and its policy limits and exclusions apply. Ask for the details in writing.
Is the broker bond the same as insurance?
No. The bond pays shippers or carriers if a broker fails to carry out its contracts. It isn't cargo insurance.
What does the $750,000 requirement cover?
It's FMCSA's minimum level of financial responsibility for public liability for for-hire carriers of nonhazardous property with a vehicle of 10,001 pounds or more. It's not a cargo policy.
Related reading: how freight claims work, our bond guide and cargo theft in trucking. Fraud prevention is a related read.
