Cargo insurance limits explained

BI&PD is not cargo

The $750,000 / $1,000,000 / $5,000,000 figures in 49 CFR 387.9 are public liability: bodily injury and property damage to the public. They pay third-party injury and wreck damage. They do not pay for the freight on the trailer.

Brokers require cargo coverage because a destroyed load is otherwise an unsecured loss against the motor carrier. That requirement is contractual. For ordinary property, FMCSA does not set a federal cargo minimum the way it sets BI&PD.

If someone says “they have $1,000,000 insurance” on a dry-van load, ask which line. A $1,000,000 BMC-91 with a $100,000 cargo policy is a $100,000 cargo problem. Write both numbers in the file.

BMC-34 is optional for most property carriers

Form BMC-34 (or BMC-83 surety) is the federal cargo filing on L&I. Household-goods motor carriers have a cargo-security filing duty under 49 CFR 387.303. Ordinary for-hire property carriers usually show no BMC-34 and still operate legally.

Absence of BMC-34 is not absence of a commercial cargo policy. Many legitimate carriers carry motor-truck cargo and never file it with FMCSA because the agency does not require that filing for general freight. Ask for the policy or a certificate. Do not treat an empty L&I cargo box as “no cargo insurance” without asking.

Presence of a BMC-34 is also not enough for a high-value load. The historic federal cargo floors for household goods are far below what a broker needs on electronics or machinery. Read the commercial limit, not the FMCSA box, for load value.

named insured must be the motor carrier you dispatch

The named insured on the cargo certificate must be the legal entity on the rate confirmation and on the FMCSA record. A certificate in a sister LLC, a dispatch company, or an owner-operator’s personal name is not coverage for the MC unless the MC is actually named.

Additional-insured endorsements naming your brokerage do not fix a wrong named insured. If the policy is not the carrier’s policy, you have paper, not coverage. Call the producer if the name is close. Close is not a match.

Date the certificate. A cert emailed last month does not override a cancellation. Cargo is usually not on L&I for general freight, so the producer callback is the check. Save the email and the phone note.

exclusions: electronics, used machinery, frozen

Motor-truck cargo forms often exclude or sublimit commodities brokers actually book. Electronics, used or reconditioned machinery, and frozen or temperature-controlled product are common restriction lists. A $250,000 limit with a $10,000 electronics sublimit is a $10,000 policy on that TV load.

Used machinery is frequently excluded or limited because condition at origin is hard to prove. Frozen product often needs a refrigeration-breakdown endorsement in addition to cargo. If the form is silent, ask. If they will not send the exclusions page, assume you have not seen the coverage.

Do not invent a percentage. Read the form. Write the excluded commodities and any sublimit next to the load’s commodity. If this shipment is on the excluded list, the limit on the declarations page is irrelevant.

load value versus policy limit

The cargo limit must meet or exceed the value of the freight in that trailer, after exclusions and sublimits. A $180,000 machine on a $100,000 policy leaves $80,000 uninsured. Either raise the limit, split the shipment, or do not cover.

Deductibles sit under the limit. A $100,000 limit with a $5,000 deductible still responds above $5,000 if the loss is covered. Deductibles do not create coverage for an excluded commodity. Record the deductible so the shipper is not surprised.

Released-value and tariff limits on LTL are a separate contract problem. A national LTL tariff may cap liability per pound. That cap is not the FMCSA BI&PD filing and it is not a $100,000 cargo policy. Get a declared-value agreement in writing when the invoice exceeds the tariff.

certificates, producers, and what L&I will not show

L&I is the system of record for required BI&PD filings. It is not the system of record for most cargo policies. A green L&I screen does not mean cargo exists. A cargo PDF does not mean BI&PD is on file.

Call the producer on a number you look up, not only the number on the PDF, if the cert looks off: wrong named insured, round-stamp graphics, or a limit that changes between versions. Confirm the policy is in force for the pickup date and that the commodity is not excluded.

Re-check before dispatch if the cert is old. Policies cancel. Endorsements change. The useful habit is a dated cert in the load folder, not a onboarding PDF from last year.

reefer, high-value, and used equipment as special cases

Temperature-controlled freight needs cargo plus refrigeration-breakdown, at a limit that covers product value. Federal BI&PD will not pay for a spoiled trailer. Set point and recorder are operational. The endorsement is insurance.

High-value electronics need the exclusions page before you book. If the carrier’s cargo form excludes consumer electronics or chips, a higher limit does not help. Shop a carrier whose form covers the class, or require a specific trip policy that names the load.

Used machinery: get the exclusion in writing. If used equipment is excluded, do not send a used CNC because “they haul machinery all the time.” New machinery and used machinery are different underwriting questions.

what “full coverage” never meant

Carriers will say they have full coverage. That phrase is not a form. Ask for BI&PD amount on L&I, cargo limit, deductible, and whether this commodity is excluded. Four answers. If they only repeat “full coverage,” you do not have insurance facts.

A certificate of insurance is evidence the producer was willing to type those numbers on a date. It is not a promise the loss is covered. Coverage follows the policy, the named insured, the exclusions, and whether the loss happened in transit under that policy’s terms.

If the shipper’s contract requires a higher cargo limit than the carrier carries, you either get a trip policy that names this load, move the freight in a way that lowers value per trailer, or you do not cover. Do not paper over the gap with a rate-con sentence that the carrier “is responsible.” Responsibility without a solvent policy is a lawsuit, not a recovery.

desk checklist

• BI&PD amount on L&I recorded separately from cargo limit.
• Named insured on the cargo cert is the FMCSA legal name (or listed DBA on the same entity).
• Cargo limit, after exclusions and sublimits, ≥ load value.
• Exclusions page reviewed for electronics, used machinery, frozen, or this commodity.
• Deductible noted; refrigeration-breakdown confirmed if the load is temperature-controlled.
• BMC-34 treated as optional for general property; commercial policy still required by your contract.
• Producer or issuer confirmed if the certificate is first-time or the name is close-but-not-same.

what belongs in the load file

• L&I screen for BMC-91/91X (BI&PD) with date.
• Cargo certificate or policy declarations with named insured and limit.
• Exclusions / sublimits page or a producer email stating this commodity is covered.
• Load value used to test the limit.
• Producer callback note when the cert was questioned.

fail closed

• No cargo coverage on the motor carrier that is actually dispatched.
• Named insured is a different legal entity than the MC.
• Load value exceeds cargo limit after exclusions.
• Commodity is excluded (electronics, used machinery, frozen, or other listed class) with no trip endorsement.
• Certificate cannot be confirmed and the producer will not answer.