Protect Your Assets

As you know, a Freight Broker serves a vital role in the intricate machine that is freight movement. By connecting shippers and carriers who may not otherwise be able to find each other, you keep the industry humming.

Being a freght broker means investing large amounts of time learning the shipping industry inside and out. Then comes license costs, insurance, and surety bonds. This type of investment is too valuable to leave to any insurance. You must make wise choices. Not only are you expected to protect yourself, but you must look out for your shippers and customers as well.

Broker Shield Freight Insurance offers you a level of coverage that will protect you against unforseen cases that your Carrier's insurance company may not cover.

Broker Shield Insurance coverage provides you with all the protction you'll need. From contingent cargo, all-risk cargo, to third party auto liability and the standard Property & Casualty lines insurance we protect every facet of your business.

Our "value added" services set us apart from other insurance companies by including claims management and recovery services. We focus on making truckers responsible for any damage or theft, leaving your company to concentrate on moving freight. We conduct a contractual review of trading terms & conditions for both Shipper clients & Carrier agreements. We provide an evaluation of claims data and feedback, helping support your logistics chain. We have a training program that helps you understand the full scope of your exposures. We will also give you marketing materials that will help you to stand out amongst your competitors.

Don't risk your company's future with inadequate insurance, Contact us so we can help keep you moving.

A Brief Overview of the Carmack Amendment

The Interstate Commerce Act was established in 1887 to deal with the rise of the railroads and the growth of cross country travel and freight delivery. The intent was to regulate interstate transportation.

In 1906, the Carmack Amendment was added to the Interstate Commerce Act which was enacted by Congress to establish uniform federal guidelines for shipping across state lines. These guidelines were designed to reduce confusion surrounding a carrier's liability when there was damage to a shipper's interstate shipment.

The Carmack Amendment establishes the limits of liability for the carriers. The liability imposed is for the “actual loss or injury to the property”. There are no caps on liability the carrier assumes through the Carmack Amendment. Therefor, when the carrier takes possesion of the cargo they become 100% liable for the load.  

The carrier and the shipper sign a contract named a "bill of lading". The Carmack Amendment allows some carriers to limit their liability in this contract. The amount they assume for cargo damage can vary, but it's generally around $1 Per Lb.
The Carmack Amendment supersedes individual state laws and ensures that all parties are treated with one set of rules. This also means that any state law claims can be dismissed, as the Carmack Amendment takes precedence.

There is a protocol for filing claims under the Carmack Amendment. In order to bring a lawsuit, a written claim must be filed with the carrier within nine months of the date of the delivery of the property. If no delivery was made, then the claim needs to be filed within nine months after a reasonable time for delivery has passed.

Feel free to contact us with any questions or concerns you may have about the Carmack Amendment or other shipping related laws. It's our speciality and we're happy to help.

What you need to know about International Cargo Insurance

If your business conducts business with ocean freight, purchasing insurance could be a valuable asset to stablizing your bottom line. Maritime law dictates that if a cargo ship need to jettison any cargo to preserve the lives aboard and the ship itself, all owners of cargo share the cost of the lost goods. You could still receive your products but also still receive a bill to pay for the lost goods of another patron.

Cargo ships sink and are attacked on a frequent basis.

• 1 dies and 14 missing after ship sinks in Philippines
• Pirates attack British cargo ship in Gulf of Guinea
• Battling Somali pirates in the Seychelles

These kinds of events should be expected. This is why having ocean freight insurance can help save you money. It not only allocates funds for lost cargo, but it also relinquishes your financial liability to recooperate the losses of the other cargo owners.

It is important to know who needs to provide the insurance. Sometimes the shipper exporting the goods will insure them until they reach the buyer. Insuring through a company in the United States can provide you some added advantage if you need to file a claim.

As always, document carefully the value of each item. This gives you standing in which to enforce your claim.

Be sure to take care in reading what type of coverage you are receiving. Some insurers will offer an "all-risk" type of insurance so that any event will be covered for you & others offer specified perils only. 

When needing goods shipped over seas, it is important to consider insurance for your shipment. If you don't, you could be financially responsible for the other customers' cargo too.

Do Freight Brokers Really Need Auto Insurance?

Freight Brokers wrestle with many questions when deciding cost management strategies. One of the biggest is whether or not they need Auto Insurance. The straight forward answer is absolutely. There are so many unpredictable, uncontrollable forces out there, (accidents, storms, hijackings, theft, vandalism) that it's impossible to avoid a lawsuit sooner or later, even if you have nothing to do with the incident. Just having your cargo there can put you at risk. If a truck gets into an accident, the first thing lawyers want to do is drag everybody they can into court. The average claim on an auto accident is about 2.6 million dollars. Without proper Auto Liability Insurance, such a claim can be devastating to a business. Liability costs for shipping skyrockets, severly impairing profitability.

There are many steps you can take to protect your assets and not face serious punitive damages as a result of death or injury from the movement of freight. One of the best steps is having someone with years of industry experience to review your current business model & current contracts in place. GSIS, Inc. is a leader in Risk Management education and Insurance Solutions. Our company is focused on educating our clients on risk management stratagies for the freight broker industry. We are always interested in spreading current news topics relating to the industry including major catastrophes and current laws that effect the Freight Broker/Transportation industry. Contact us at http://www.gsis.com

Here at Global Solutions Insurance Services Inc. we deal in the many forms of domestic and international trade insurance and our trained professionals help you choose a policy that fits your needs perfectly.

Avoiding a $26 Million Claim

Freight Broker Risk Management 101

You are a Domestic Freight Broker. You gave up your common carrier authority years ago. Now you enjoy the comfort of limited liability thanks to common law and don’t play by the Carmack Amendment. Right?

Many brokers believe that the separation of authorities will nullify the risk of being seriously affected by a lawsuit as a result of the movement of freight. However this is merely one step in a series of steps to help prevent being sued as anything other than a Freight Broker (which enjoys limited liability).

The other day I was reading an insurance policy wording and it was clearly set up to cover damages for a; Motor Carrier, Warehouseman, Freight Forwarder, Logistics ServiceProvider or Other Bailee.

A plaintiff’s attorney would read the policy wording and say “Eureka! We got them now. If they are a freight broker why would they buy coverage for a motor carrier, or freight forwarder? They are clearly holding themselves out to be something other than a freight broker. “

If an auto accident occurs injuring or killing a third party the average settlement is $2.6 Million. The average truck driver only carries $1 Million in liability coverage. What most attorneys do is drag everyone who had anything to do with the shipment into this case including a Freight Broker and those with the deepest pockets.

In recent court cases such as Travelers Insurance a/s/o Vera Bradley Designs v. Panalpina, Inc., 2010 WL 3894105 (N.D. IL. 2010). The courts have upheld the notion that even though you have sole freight broker authority, how you hold yourself out to be (i.e. the way you run your operations, contracts in place, broker/shipper/carrier relationships) plays a big role in how the courts will actually view your authority.  

There are many steps you can take to protect your assets and not face serious punitive damages as a result of death or injury from the movement of freight. One of the best steps is having someone with years of industry experience to review your current business model & current contracts in place. GSIS, Inc. is a leader in Risk Management education and Insurance Solutions. With tailor made products specifically designed for Freight Brokers you will not find yourself in this situation. When it comes to Freight Brokers, GSIS should be your first call & only call every time.   

Acting outside the box of a "Property Broker"

I recently read an article in which a Property Broker was successfully sued for an accident that resulted in the death of one man and other serious injuries. What had led up to the verdict is as follows:

 

A Carrier was involved in an accident with 3 cars, killing one person & seriously injuring others. The Carrier, like 90% of the carriers on the road only carried $1 Million in liability coverage. The lawyers on the case recognized that they needed to find a fatter pig to feed the hungry mouths of the injured victims and suffering family. They successfully found that pig when they recognized that the property broker that brokered this load was a major player in the industry. Also, through some more research in the SAFER site it was discovered that the carrier of the load had a terrible safety record (I.e. 238 safety violations, 3 accidents, 1 more fatality in 18 months prior).

 

Through even more investigation it was found that the Property Broker an additional DOT authority (Something that is common in the Third-Party Logistics world). At the time of the accident the Broker had common carrier authority. This exposed them to the Carmack Amendment in which they were exposed to potentially unlimited Liability.

Statistics:

 

Ø  5000 fatalities a year on average take place relating to common carrier accidents within the U.S.

Ø  120,000 injuries a year on average take place relating to common carrier accidents within the U.S.

Ø  Actuarial statistics support average settlement for fatality in U.S involving a common carrier is 2.6 million.

Ø  It’s estimated that 90% of companies with common carrier authority only have 1 million of auto liability coverage.

 

The Storm was perfect, the broker failed to do what is arguably one of the most important jobs of a property broker which is Vetting the Carriers it chooses to tender loads. Further, the broker left himself wide open for lawsuits under his authority of a common carrier.

 

This is a prime example of the importance of a proper Risk Management Plan. GSIS,inc. is dedicated to success of every business and person we touch. Each insured is offered Risk Management Consulting Services. Our goal as an insurance provider is not only to be there when the unthinkable happens but also, minimize the exposures before the unthinkable occurs.

 

Domestic Freight Broker Contingent Cargo Insurance & It’s Importance In a Freight Brokerage’s Operation

 

Claims and law suits relating to lost or damaged cargo can arise because the trucker’s motor truck cargo policy doesn’t respond to the claim, we offer several cargo insurance programs to address each Freight Broker’s unique shipper/customer base, the sensitivities and risks involved therein.

• Contingent Cargo Legal Liability

• Contingent Cargo Broad Form Policy

• All Risk Domestic Shippers Interest Cargo Coverage

• Instant Excess Cargo coverage 

Contingent Cargo Legal Policy 

This coverage responds to defense and damage payments associated with a freight broker being named a party to a law suit including a third party motor carrier’s fatality or injury accident. This represents the greatest financial risk to freight brokerage operations. Judgments have been as high as 24 million against a freight brokerage operation. Our freight broker auto liability policy with a duty to defend, will provide defense, pay defense costs and any attributable damages, or settlement up to policy limits. Our primary policy covers up to $1 million “per occurrence” versus other forms in the market which may have an “annual aggregate limit”.

Contingent Cargo Broad Form Policy

This coverage is required when a freight broker agrees to assume responsibility for cargo loss or damage that a motor carrier fails to pay. Whenever a freight broker signs a contract with a customer client it should be reviewed to determine if it is expanding the freight broker’s liability assumed under their D.O.T. domestic freight broker authority. Often these contracts contain indemnity clauses which require the freight broker to assume responsibility for a cargo claim should the trucker fail to pay for loss or damage associated with the freight. This coverage is available for FTL (Full Truck Load) shipments for most commodities shipped. However, certain high risk cargo exposures i.e. liquor, tobacco, high valued electronics, cell phones, copper and other non-ferrous metals require Broad Form cargo coverage with a strategic risk management program to reduce theft.

All Risk Domestic Shipper’s Interest Policy

The movement of freight with LTL motor carriers requires a broader form of cargo coverage than provided by motor carrier’s with legal tariffs where liability is limited to as little as $1 per lb. We can set up a shipper’s interest cargo program where coverage is purchased on a shipment by shipment basis for those shipper’s who want full replacement cargo coverage in place. We provide an on-line web based insurance platform that allows coverage to be instantly placed.

 

High Risk Cargo Program for Freight brokers who decide to move high risk cargo won’t typically qualify for a Contingent Cargo Broad form policy but rather will require a primary cargo program where adequate security in the movement of freight must be present. We can successfully place cargo coverage for these high risk cargoes, when proper security is present in the movement of this freight.

Instant Excess Cargo Coverage

When a truckers MTC policy limit is not high enough for the value of the shipment (most have only $100,000) you can purchase instant excess cargo insurance by going to www.fiasap.com . This allows a freight broker to have more flexibility in assigning a trucker to move a shipment. The cost for this instant excess cargo insurance can often be passed along to the trucker or built into the freight charges to the shipper. If any given account has enough volume of shipments, that require excess cargo coverage, a policy can be established for that account.

 

  

A Freight Broker’s participation in Broker Shield can support their marketing activities. A Freight Broker dedicated to Risk Management, fully bonded and insured, is a more attractive logistics provider to Shippers. Such Freight Brokers offer shippers the prospect of better service and on-time delivery to the Shipper/Customers. A Freight Broker’s client can also be added as “Additional Insured” under the Freight Broker policies, extending legal defense to these parties. This can be a very substantial value added service that separates one domestic logistics operation from another, and is a better alternative to certain shipper agreement provisions that may impose commercially unfeasible assumption of responsibility and/or Insurance.

For a Quote, or to talk to a GSIS representitive click here.