The short version
- Direct shipper contracts usually ask for more than broker agreements: higher auto liability or an umbrella, general liability, workers comp, and endorsements naming the shipper.
- The endorsements matter more than the limits: additional insured status, waiver of subrogation and primary and non-contributory wording come from the policy, not the certificate.
- Shippers often require coverage for work at their docks and yards, which is general liability territory, not auto liability.
- Compare the contract’s insurance exhibit to your policies and endorsements before you sign, then have an attorney review the indemnity language.
Why a shipper contract is different from a broker agreement
When you haul directly for a shipper, there is no broker in the middle absorbing the relationship. The shipper's risk manager or legal team writes the agreement, and it often looks more like a vendor contract than a freight contract. Expect a longer insurance exhibit, an indemnity clause written by the shipper's lawyers, and requirements for coverages that a broker would never ask about.
Three features show up again and again:
- Higher liability limits, often met with an umbrella. The federal floor for non-hazardous for-hire freight is $750,000 (49 CFR 387.9). A shipper contract may ask for more, and the usual way to meet it is a trucking umbrella or excess layer over your primary auto liability.
- Coverage for what happens off the road. Drivers back into docks, open trailers, use the shipper's forklifts, and walk through the yard. That exposure belongs on truckers general liability, and the shipper wants to be covered on it.
- Endorsements in the shipper's favor. Additional insured status, a waiver of subrogation and primary and non-contributory wording.
If you also handle the shipper's trailers or containers, the contract may require trailer interchange or similar physical damage coverage for equipment you do not own.
How a trucking liability tower stacks
The endorsements, in plain language
Additional insured
The shipper wants to be covered under your policy for claims arising out of your work for them. That requires an endorsement on the policy. In Texas, a certificate "shall not confer to a certificate holder new or additional rights beyond what the referenced policy or any executed endorsement of insurance provides" (Tex. Ins. Code §1811.153). Checking the "ADDL INSD" box on a certificate does not do it. See certificate holder vs additional insured.
Waiver of subrogation
A waiver is "an acknowledgment by an insurer that it has no right to subrogate against a liable third party" after paying a claim (IRMI). The shipper wants your insurer to give up its right to recover from the shipper. Insurers usually grant it by endorsement, sometimes for an added charge, and it is often needed separately on auto, general liability and workers comp.
Primary and non-contributory
This wording sets "the order in which multiple policies triggered by the same loss are to respond" (IRMI). Your policy pays first and does not ask the shipper's insurance to share. Again, it comes from the policy, by endorsement.
Notice of cancellation
Many contracts ask for 30 days notice to the shipper if your policy cancels. In Texas, someone has a legal right to notice only if they are named in the policy or an endorsement and the policy or a law requires it (§1811.155). A certificate cannot promise it.
Contract requirement vs. policy reality
Use this table to sort what is easy, what takes an endorsement, and what may require a new policy or layer.
| Contract term | Where it lives | How it is usually met |
|---|---|---|
| Auto liability above your primary limit | Auto policy plus umbrella or excess | Umbrella or excess layer |
| General liability per occurrence and aggregate | Truckers general liability policy | GL policy, if you do not have one |
| Shipper as additional insured | Auto and GL endorsements | Scheduled or blanket AI endorsement |
| Waiver of subrogation | Auto, GL and workers comp endorsements | Waiver endorsement on each policy |
| Primary and non-contributory | Auto and GL endorsements | Primary/non-contributory endorsement |
| Workers compensation | Workers comp policy | Policy if you have employees, or negotiate |
| Cargo at the shipper’s declared value | Motor truck cargo form | Higher cargo limit or negotiate liability cap |
| Coverage for shipper-owned trailers | Trailer interchange or non-owned trailer coverage | Endorsement or separate coverage |
Indemnity, limitation of liability, and what to send to a lawyer
A shipper agreement almost always includes an indemnity clause. Read it next to the insurance exhibit. If the clause makes you responsible for claims that your policies would not cover, you are self-insuring that gap.
Look carefully at:
- Indemnity for the shipper's own negligence. Your policies may not respond, and enforceability is a legal question.
- Cargo liability at declared value with no cap. The federal and Texas rules do not require general freight cargo coverage at all, so any cargo number is negotiated. If the shipper's freight is worth more than your cargo limit, ask for a liability cap in the contract or raise your limit.
- Insurance "with no exclusions." No trucking policy has no exclusions. A clause like this sets you up to be in breach on day one. Ask to replace it with the specific coverages and limits the shipper actually needs.
- Requirements that flow down to subcontractors. If you broker overflow loads or use owner-operators, the contract may make you responsible for their insurance too. See leasing owner-operators.
We explain the insurance. An attorney should review the indemnity and limitation-of-liability language.
What to do this week
- Get the full insurance exhibit, including any vendor manual or onboarding checklist it references.
- Collect your declarations and endorsement schedules for auto, GL, umbrella, cargo and workers comp. Do not work from the certificate.
- Build a two-column list: requirement on the left, policy page and endorsement number on the right. Anything without a page reference is a gap.
- Ask for missing endorsements in writing. Additional insured, waiver and primary and non-contributory endorsements are usually quick when the underwriter has the contract language.
- Price the umbrella separately if the contract limit is above your primary auto liability. Some shippers accept an excess layer that follows form.
- Negotiate what you cannot meet before you sign, and get changes in the contract, not in an email.
A policy review can do the line-by-line match for you.
Common questions
Can I meet a higher auto limit with an umbrella?
Usually yes. Most contracts allow the limit to be met with primary auto liability plus an umbrella or excess policy. Check that the contract says "combination of primary and umbrella" or similar, and that the umbrella schedules your auto policy as underlying insurance.
What is the difference between a certificate holder and an additional insured?
A certificate holder receives a summary of your coverage. An additional insured is covered under your policy by endorsement. In Texas a certificate cannot add coverage or give the holder rights the policy does not provide (Tex. Ins. Code §§1811.152 and 1811.153).
Does my auto policy cover a driver who damages the shipper’s dock or forklift?
It depends on whether the damage arose out of the use of a covered auto. Damage done by the truck generally falls under auto liability. Damage done on foot, by loading equipment, or during work not involving the truck may fall to general liability. That is why many shipper contracts require both.
The shipper wants workers comp and I have none. Do I need it?
Texas lets most private employers choose whether to carry workers comp, but a shipper can require it by contract. Texas also requires intrastate carriers that haul for hire between municipalities to cover employees with workers comp or approved accident coverage (Tex. Transp. Code §643.106). See trucking workers comp in Texas.
Sources
- 49 CFR 387.9, Financial responsibility, minimum levels. Federal liability minimums that a shipper contract builds on.
- Tex. Ins. Code ch. 1811, Certificates of Insurance. Certificates cannot add coverage, confer rights or create notice rights.
- IRMI glossary: Waiver of subrogation. Definition of a waiver of subrogation.
- IRMI glossary: Primary and noncontributory. Definition of primary and noncontributory.
- Tex. Transp. Code ch. 643, Motor Carrier Registration. Workers comp or approved accident coverage for intrastate carriers hauling between municipalities (§643.106).
This page explains insurance, not law. Have your attorney review indemnity and contract language; our job is making the insurance match it.
Keep reading
Contracts and deadlines
A broker sent me a carrier agreement. What insurance does it actually require?
Questions
What is the difference between a certificate holder and an additional insured?
Questions
What does primary and non-contributory mean?
Coverage
Trucking umbrella and excess liability: the limits above your primary auto policy
Coverage
General liability for truckers: what it covers that your auto policy does not