A broker sent me a carrier agreement. What insurance does it actually require?

A broker, under federal rules, is someone who "for compensation, arranges, or offers to arrange, the transportation of property" by an authorized motor carrier (49 CFR 371.2). The broker does not haul the freight. You do. The carrier agreement is how the broker pushes the risk of the load onto the party that actually controls the truck.

Most agreements do the same four things, in roughly this order:

1. Confirm you are a real, authorized carrier. Active authority, a satisfactory or unrated safety record, a current BOC-3 and an insurance filing on record with FMCSA.
2. Set insurance minimums for auto liability, cargo and sometimes general liability, workers comp, trailer interchange and reefer breakdown.
3. Shift liability through an indemnity clause, a cargo liability clause (often written to the full value of the load), and sometimes a double-brokering prohibition.
4. Control the paperwork: who gets a certificate, how fast you must report a claim, and what happens if your policy cancels.

The insurance section and the liability section work together. If the agreement makes you liable for the full value of the load but your cargo policy pays only a set limit, the difference is your money. That is why a broker-carrier agreement deserves a careful read even when the limits look routine. If you want a fast first pass, the broker agreement decoder flags the insurance clauses that most often cause trouble.

Wording differs from broker to broker, but the requirements tend to fall into the same buckets.

Auto liability

The federal minimum for for-hire carriers of non-hazardous property in vehicles of 10,001 pounds or more is $750,000 (49 CFR 387.9). Many broker agreements ask for $1,000,000, which is why most trucking policies are written at that limit. See why brokers ask for $1 million. Watch for wording like "any auto" or "covering all units dispatched under this Agreement." If your policy is written on scheduled autos, a unit you forgot to add is not covered, no matter what the certificate says. More in scheduled auto vs any auto.

Motor truck cargo

Federal rules require cargo security only for household goods carriers (49 CFR 387.301). For general freight, the cargo requirement is purely contractual, so the agreement sets the number. The bigger issue is not the limit, it is what the cargo form excludes: unattended vehicles, theft without forced entry, specific commodities, and refrigeration breakdown. See how much cargo insurance brokers require.

General liability

Some agreements require it, especially when loads involve pickups or deliveries at shipper facilities. Truckers general liability covers premises and operations exposures that the auto policy does not.

Trailer interchange and non-owned trailers

If you pull trailers you do not own under an interchange agreement, the broker or shipper may require trailer interchange coverage for physical damage to that trailer.

Reefer breakdown

For temperature-controlled freight, many agreements require that cargo coverage include spoilage from refrigeration unit failure. Standard cargo forms often exclude or limit it unless reefer breakdown coverage is added.

Workers compensation

Texas lets most private employers choose whether to carry workers comp, but a broker can still require it by contract. See trucking workers comp in Texas.

This is the comparison to do before you sign. The left column is the language you will see. The right column is what has to be true in your policy, not just on your certificate.

Most broker agreements include an indemnity clause that says, in some form, that the carrier will defend and hold the broker harmless from claims arising out of the carrier's performance. Your auto liability policy responds to bodily injury and property damage caused by an accident involving a covered auto. It may or may not respond to every obligation you agreed to in a contract, and broad indemnity language can reach further than your coverage.

Watch for three things:

• Indemnity that covers the broker's own negligence. Whether a clause like that is enforceable, and whether your policy would pay for it, are separate questions. Have an attorney review the clause itself.
• Cargo liability "to the full invoice value" or "replacement value" when your cargo limit is lower. The agreement does not raise your limit. It just makes you personally responsible for the gap.
• Liquidated damages or fees for late delivery, service failures or double brokering. Insurance generally does not pay contract penalties.

We explain the insurance side. Where the question is what the contract means or whether a clause is enforceable, an attorney should review it.

1. Pull your declarations pages and your cargo form, not just a certificate. The certificate is a summary. In Texas, a certificate of insurance "is not a policy of insurance and does not amend, extend, or alter the coverage" of the policy (Tex. Ins. Code §1811.152).
2. Match each insurance clause to a policy page. Use the table above. Mark anything you cannot find.
3. Check your cargo exclusions against the freight you will haul for this broker. Commodity, reefer, unattended vehicle and theft conditions are where claims get denied.
4. Confirm every unit you will dispatch is on the policy, if your auto liability is written on scheduled autos.
5. Ask for the missing endorsements now, not after a load is booked. Additional insured, waiver of subrogation and primary and non-contributory wording all come by endorsement, not by checking a box.
6. Send the agreement to an attorney if the indemnity or cargo liability language goes beyond what your policy covers.

If something does not line up, a policy review will tell you whether the fix is an endorsement, a higher limit, or a conversation with the broker.