Contingent and Secondary Coverages Every Carrier Should Know: Freight Broker, Motor Truck and Garage Liability

In the U.S. trucking and logistics market — from Los Angeles and the Inland Empire to Houston, Chicago and Miami — primary policies (auto liability, motor truck cargo, physical damage) are only part of a comprehensive program. Contingent and secondary coverages exist to protect brokers, carriers, and repair facilities when a named insurer fails, gaps emerge, or a contract allocates unexpected responsibility. This guide explains the core contingent/secondary coverages, typical limits, when each applies, and realistic cost expectations for carriers and freight brokers operating in the United States.

Table of Contents

Why contingent coverages matter

Primary carriers can deny a claim for many reasons: lapsed policies, excluded operations, or failure to add required endorsements.
Brokers and shippers increasingly ask for contingent protections in contracts to avoid direct exposure.
State laws, local loss trends (e.g., cargo theft in Southern California), and fleet mix influence which contingent products are essential.

For fundamentals on how liability, cargo and physical damage interrelate, see Trucking and Logistics Insurance 101: Breakdown of Liability, Cargo and Physical Damage Coverages.

Key contingent & secondary coverages (definitions, when they apply, typical limits)

1) Contingent Cargo Coverage (for brokers and shippers)

What it is: Coverage triggered when a motor carrier’s cargo policy fails or is insufficient to pay an approved cargo loss for goods brokered or arranged by a freight broker.
When it applies: Cargo loss where the hired carrier is uninsured, insolvent, or denies coverage due to an exclusion.
Typical limits: Often mirrors common cargo limits — $100,000 to $500,000 per occurrence for broker programs; can be purchased per-load or on a broker’s policy.
Pricing: For brokers adding contingent cargo to an existing inland marine or broker liability package, expect modest annual premiums; many programs price this as a function of cargo exposure. (Broker bond requirements and costs are a related compliance item — FMCSA requires a $75,000 surety or trust for brokers: see FMCSA brokerage rules.) Source: FMCSA registration rules and market surety guidance: https://www.fmcsa.dot.gov/registration/brokers and https://www.suretybonds.com/freight-broker-bond/.

2) Contingent Auto Liability / Broker Liability for Brokers

What it is: Protects brokers if they are found legally liable for a loss caused by a motor carrier that is uninsured or underinsured.
When it applies: Lawsuits alleging the broker exercised operational control of a carrier, or when carrier coverage lapses.
Typical limits: $300,000 to $1,000,000; brokers frequently carry $1M umbrella/primary contingent limits depending on contract.
Why brokers buy it: To meet contractual demands from shippers and to limit vulnerability when primary motor carrier policies are deficient.
See more on when to use primary vs contingent coverages: When to Use Primary vs Contingent Coverages in Trucking and Logistics Insurance.

3) Motor Truck Cargo — Contingent/Excess Options

What it is: Carrier cargo policies are primary; contingent cargo sits behind the carrier. Some carriers use excess cargo or broadened named insured endorsements.
When it applies: Losses that exceed carrier limits or when carrier denial occurs.
Typical limits: $100,000; common carrier cargo exposures increase to $250,000+ per truck for high-value lanes (electronics, pharmacy loads).
Pricing: For carriers, motor truck cargo premiums can range widely — small LTL or local carriers might pay $1,000–$4,000 per truck/year; long-haul or high-value fleets often significantly more. Market quotes from major underwriters like Progressive Commercial, Great West, and National Indemnity reflect these variances (see Progressive’s overview for typical truck insurance costs). Source: Progressive commercial guidance: https://www.progressivecommercial.com/answers/how-much-does-truck-insurance-cost/

4) Garage Liability & Garagekeepers (for repair shops, dealers, and service facilities)

Garage Liability (GL): Liability arising out of garage operations (sales, service, road testing).
Garagekeepers: Covers customers’ vehicles in the care, custody or control of a garage operation (e.g., repair shops, tow yards).
When it applies: Theft, vandalism, fire or damage to customer vehicles while in custody; liability for bodily injury/property damage due to garage operations.
Typical limits: Garage liability policies commonly carry limits of $1,000,000; garagekeepers limits vary by exposure from $50,000 to $1,000,000.
Pricing: Garagekeepers premiums can range from a few hundred to several thousand dollars per location annually depending on limits, number of cars handled, and presence of secure storage. Authoritative overview: Insurance Information Institute: https://www.iii.org/article/what-is-garagekeepers-liability-insurance

How these coverages interrelate — practical flow in a loss

Primary motor carrier auto/cargo policy pays first (if in force and applicable).
Carrier umbrella/excess may pick up above primary limits.
Contingent cargo or contingent auto responds when primary carrier denies, is insolvent, or lacks coverage for the claim.
Broker contingent liability or contingent cargo protects brokers/shippers who contracted transportation but lack direct control or whose named carrier is insufficient.
For vehicle damage at a repair facility, garagekeepers responds; if the repair shop’s negligence causes a bodily injury claim, garage liability responds.

For a deeper look at how these lines fit into a coordinated program, read: How Liability, Cargo and Physical Damage Interrelate: Building a Coordinated Trucking Insurance Program.

Typical limits and deductible strategies (quick reference table)

Coverage	Typical Limits (Common US market)	Typical Deductible	When it triggers
Contingent Cargo (Broker)	$100K – $500K	Per-loss or per-shipment deductible $500–$2,500	Carrier denial/insolvency
Contingent Auto Liability (Broker)	$300K – $1M+	N/A or retention $5K–$25K	Alleged broker liability / carrier lapse
Motor Truck Cargo (Carrier)	$100K – $250K per vehicle	$500 – $5,000	Physical loss/damage to freight
Garagekeepers (Repair/Dealer)	$50K – $1M	$500 – $2,500	Damage to customers’ vehicles in custody
Garage Liability	$1M typical	$0 – $5K	BI/PD from garage ops

Real-world cost signals and market players

Freight broker compliance: FMCSA requires a $75,000 broker bond/trust (BMC-84/BMC-85) — surety pricing typically 1–3% annually depending on credit (roughly $750–$2,250/year for most brokers). Source: FMCSA and surety market guidance: https://www.fmcsa.dot.gov/registration/brokers and https://www.suretybonds.com/freight-broker-bond/
Trucking insurers serving the U.S. market include Progressive Commercial, Great West Casualty, National Indemnity (Berkshire Hathaway), Travelers, and others. Progressive’s commercial guidance shows how location, revenue, driving history and cargo type drive substantial cost variance; many owner-operators see annual premiums in the low thousands to tens of thousands depending on exposures. Source: Progressive commercial guidance: https://www.progressivecommercial.com/answers/how-much-does-truck-insurance-cost/
Garagekeepers and garage liability pricing varies by state and facility exposure; insurers like Travelers, CNA, Chubb and regional carriers underwrite these risks with location-specific adjustments (theft rates in Los Angeles vs. Tulsa or Miami).

Practical purchasing tips for U.S. carriers & brokers

Document contracts: require carriers to provide proof of primary auto and cargo limits and an additional insured / loss payee endorsement where appropriate.
Verify certificates and audit them regularly — many contingent claims arise from expired coverage or wrong named insureds.
Consider a contingent cargo and broker contingent liability policy if you broker freight in high-theft corridors (e.g., Southern California, South Florida, I-95 corridor).
Use retention strategies: higher deductibles on primary policies often reduce premium, but never increase contingent exposure without matching secondary limits.
Work with carriers and brokers that place coverage with admitted U.S. insurers familiar with local court environments (e.g., California, Texas, Illinois).

Conclusion

Contingent and secondary coverages fill critical gaps in trucking and logistics insurance programs — especially for freight brokers, carriers operating in high-risk lanes (Los Angeles, Houston, Chicago, Miami), and repair/dealer operations. Focus on matching limits to contractual obligations and route/cargo exposures, verify primary insurance frequently, and consider contingent products as part of a layered defense against carrier insolvency, coverage denials, or catastrophic cargo losses.