Short answer
A broker-carrier agreement is the master contract a freight broker signs with each motor carrier before tendering loads. It covers rates and payment, cargo liability and claims, indemnity, insurance limits and endorsements, and often a no-back-solicitation clause. Federal law (49 U.S.C. 14101(b)) lets carriers and shippers waive many rights in writing, but not the rules on registration, insurance, or safety fitness.
- The insurance section is where carriers most often get rejected or exposed. Read it against your actual policies, not just your certificate.
The sections that matter for insurance
- Insurance requirements. Minimum auto liability, cargo, and sometimes general liability, workers comp, or trailer interchange. Many brokers ask for $1 million auto liability. See why brokers require $1 million.
- Endorsements. Additional insured, primary and non-contributory, and waiver of subrogation wording.
- Cargo liability. Many agreements make the carrier liable for the full value of the freight, consistent with the Carmack Amendment (49 U.S.C. 14706), sometimes with added conditions. Compare that to your cargo limits and exclusions.
- Indemnity. Who defends and pays whom for claims. This is a legal clause, not an insurance one; have an attorney review it.
What federal law says about these contracts
Under 49 U.S.C. 14101(b)(1), a carrier and shipper can expressly waive, in writing, rights and remedies under the federal transportation statutes for the transportation covered by their contract. The same provision says the parties may not waive the provisions governing registration, insurance, or safety fitness. In practice, a broker contract can reshape payment terms and cargo claim procedures, but cannot make federal insurance minimums disappear.
Brokers also have record-keeping duties. Under 49 CFR 371.3, a broker must keep a record of each transaction for three years, and each party to the transaction has the right to review it. Some agreements ask the carrier to waive that review right; that is a business and legal decision to make deliberately.
How to review one quickly
- Pull the insurance section and list every limit and endorsement it requires.
- Compare each line to your declarations and endorsement schedule.
- Mark gaps: limits too low, missing endorsements, commodity exclusions that conflict with the freight.
- Send indemnity and liability language to an attorney.
Our broker agreement decoder does the first three steps, and broker-carrier agreement insurance requirements walks through common clauses in depth. If a packet has already bounced, start with carrier packet insurance rejected.
Sample trucking certificate: where onboarding fails
- 1Name does not match FMCSA. The certificate says "LLC" but the USDOT record and operating authority say "Inc." Onboarding checks compare the two, including DBAs.
- 2Unit not on the schedule. Auto liability is written on scheduled autos, and the truck dispatched on the load is not on the list. The broker may ask for the VIN to be added.
- 3Cargo limit below the agreement. A $50,000 cargo limit against a broker-carrier agreement that asks for $100,000 fails, however clean the rest is.
- 4Reefer breakdown not shown. A refrigerated carrier with nothing showing reefer breakdown coverage. Many cargo forms leave out spoilage from unit failure unless it is added.
- 5Holder name or address wrong. The broker's legal name or mailing address does not match its setup instructions, so the certificate is sent back.
- 6Policy period expired. Last term's certificate. Dates are the first thing an automated check reads.
- 7Additional insured box without the endorsement. An X under ADDL INSD does not add anyone to the policy. If the agreement asks for it, the policy needs an endorsement.
- 8No cancellation notice to the holder. The standard wording only points to the policy provisions. A promise to notify the holder takes an endorsement on the policy.
Common questions
Do I have to sign the broker’s agreement as written?
No, but many brokers will not change it. If a clause conflicts with your coverage, ask for an amendment in writing or decide whether to haul for that broker.
Does the agreement override my cargo policy?
No. Your policy pays what it covers. The agreement can make you liable for more, and that difference comes out of your pocket.
How is this different from a shipper contract?
A shipper contract is directly with the owner of the freight and often asks for broader insurance and indemnity. See shipper contract insurance requirements.
Sources
- 49 U.S.C. 14101, Providing transportation and service (Cornell LII). Section 14101(b): written waiver of rights and remedies; registration, insurance, and safety fitness cannot be waived.
- 49 CFR 371.3, Records to be kept by brokers (Cornell LII). Broker record of each transaction, three-year retention, party right to review.
- 49 U.S.C. 14706, Liability of carriers under receipts and bills of lading (Cornell LII). Carrier liability for actual loss or injury to property.
This page explains insurance, not law. Have your attorney review indemnity and contract language; our job is making the insurance match it.
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