What Brokers and Carriers Really Need to Know About Insurance in 2025
Insurance is one of the most expensive and least understood parts of a freight business. Misunderstanding your policy doesn't just create headaches; it can put your entire operation at risk.
At the April 2025 Broker-Carrier Summit in Indianapolis, three of the industry’s most experienced insurance professionals led a session called The Changing Winds of Insurance. Jared Palmer, a licensed attorney and property and casualty producer, moderated the conversation alongside Drew Singleton Wilder, Founder and CEO of Vicarious Liability Risk Management, LLC, and Tommy Ruke, Founder of the Motor Carrier Insurance Education Foundation (MCIEF). Together, they broke down where things go wrong with insurance and how brokers and carriers can fix it.
Why Coverage Symbols Matter More Than You Think
Ruke began by stressing the need for brokers and carriers to understand what their policy actually covers. When it comes to auto liability, he explained, the policy only applies when a crash involves a covered vehicle. Coverage symbols on the policy determine what counts.
“The policy responds when the crash is caused by a covered auto,” Ruke stated.
He noted that for small fleets, coverage is usually written on a specified basis. This means the vehicle must be listed by VIN number to be insured. If a broker doesn’t ask for that list, they might unknowingly use a truck that isn’t covered.
“If you're a broker requesting a certificate of insurance from a small carrier, make sure you're getting those VINs,” Ruke explained. “Without them, there’s no guarantee coverage applies to the trucks hauling your freight.”
He also discussed the importance of hired auto coverage, which many people misunderstand. This coverage can be critical when dealing with trailers or owner-operators.
“It’s important, in my opinion, for two reasons: trailers and owner-operators,” Ruke said. “If a trailer detaches during a drop-and-hook, hired auto covers it. It may also protect an independent contractor not listed on the policy.”
Contingent Auto Liability Isn’t Automatic
The panel shifted to a common pain point: when shippers ask brokers to show auto liability coverage. Palmer pointed out that many don’t realize this type of coverage isn’t designed for brokers.
“There’s no fatality truck accident that's going to get picked up in that coverage,” Palmer said. “But shippers still ask for it instead of asking for contingent auto liability, which is what actually applies to brokers.”
Wilder expanded on the confusion. Contingent coverage is often misunderstood and wrongly assumed to offer automatic protection.
“Coverage is contingent on a lot of things, including whether the broker did proper due diligence,” Wilder emphasized. “It doesn’t just kick in because the carrier’s policy failed.”
Ruke underlined the meaning of the word "contingency." He explained that it hinges on having the carrier’s actual policy.
“The term contingency means we cover what the policy of the motor carrier didn’t cover,” Ruke explained. “So if you never required a copy of the policy the motor carrier had, then there’s no contingency, because you don’t have something for us to base the coverage on.”
Trailer Interchange Confusion
Trailer interchange is one of the most commonly misunderstood insurance terms in freight. According to Ruke, the confusion often starts with shipper contracts.
“Most people ask for trailer interchange and they don’t know what they’re asking for,” Ruke said. “Nobody exchanges trailers anymore. What they’re really after is hired auto or non-owned trailer physical damage, which is broader and doesn’t require a written agreement.”
Even if the policy is correct, Ruke suggested using familiar terminology. He advised listing terms on the certificate that align with what shippers expect to see to avoid complications.
“Even if the policy is written correctly, just list ‘trailer interchange’ on the certificate if that’s what the shipper’s looking for,” he advised. “You won’t lose loads over terminology that can be clarified with your insurer.”
Cargo Insurance Isn’t One-Size-Fits-All
Ruke warned that unlike auto liability, cargo insurance policies are not standardized. They can differ dramatically in coverage and limitations.
“Cargo policies are all over the board,” Ruke cautioned. “You can buy a certificate that looks perfect and still doesn’t cover what your carrier is hauling.”
Wilder followed up by explaining the issue of declared value. A cargo policy might show high coverage limits but still leave shippers exposed if the declared value was never submitted.
Cargo Insurance Isn’t One-Size-Fits-All
Ruke warned that, unlike auto liability, cargo insurance policies are not standardized. They can differ dramatically in coverage and limitations.
“Cargo policies are all over the board,” Ruke cautioned. “You can buy a certificate that looks perfect and still doesn’t cover what your carrier is hauling.”
Wilder followed up by explaining the issue of declared value. A cargo policy might show high coverage limits but still leave shippers exposed if the declared value is never submitted.
“Even if your policy says you have $200,000 in cargo coverage, you still need to notify your commercial agent if a shipper declares a specific value,” Wilder explained. “Make sure it’s reflected on the bill of lading.”
Palmer urged brokers to dig into the details of their policies, especially when it comes to payout limitations. Many brokers assume a claim will pay out the full value of the loss, but that is not always the case.
“Your customer might be expecting full compensation, but your insurer might only pay half,” Palmer warned. “That co-insurance clause is something you need to understand and account for before a problem arises.”
Don’t Rely on Verbal Promises
The panel stressed the importance of reviewing insurance policies thoroughly and not relying on phone calls to confirm details. Palmer asked for a show of hands from those who review their insurance documents regularly. Very few went up.
“That’s sad and very normal,” Palmer said. “Most people don’t review their policies, but they should.”
Wilder pointed out that many misunderstandings occur when coverage discussions happen over the phone without a written follow-up. That leaves room for mistakes and legal exposure.
“Every conversation about coverage should be documented over email,” Wilder emphasized. “If there’s a claim, you’ll want that paper trail to show what was said and agreed to.”
He added that clear documentation protects both the insured and the agent. When disputes arise, a written record helps clarify what was promised and what was actually covered.
“There have been court cases where coverage turned on whether a conversation was documented,” Wilder explained. “Don’t skip that step.”
Certificates Still Carry Weight
Certificates of insurance often get dismissed as just paperwork, but Wilder pushed back against that thinking. He said these certificates serve as a record of what was communicated to clients and insurers.
“I hear people say certificates of insurance aren’t worth the paper they’re written on. That’s not accurate,” Wilder said. “Insurers that issue errors and omissions policies want to see those certificates submitted. That tells you they still matter.”
He also cautioned against accepting certificates at face value if they come directly from a carrier. Fraud remains a serious risk.
“Even if a carrier emails you a certificate, always verify it with the issuing agent,” Wilder advised. “Make sure the document is real before moving forward.”
The Road Ahead: Smarter, Embedded Coverage
To close the session, Palmer looked at how insurance is evolving in the freight space. He said that future policies will be shaped by better data, telematics, and risk modeling rather than outdated revenue benchmarks.
“The future is going to be data driven,” Palmer said. “Underwriting will rely more on telematics and actual risk profiles than gross revenue.”
He questioned why brokers and carriers are still paying premiums based on revenue. That metric doesn’t necessarily reflect the actual risk being moved.
“Ask your broker why your premium is based on how much revenue you do,” Palmer challenged. “If you move government freight with low claims, why are you paying more than someone moving bulk freight with higher exposure?”
He also shared that embedded insurance, already appearing in other industries, is coming to freight. The idea is to offer coverage directly within transportation management systems.
“You’ll be able to manage policies, add endorsements, and file claims from inside your TMS,” Palmer said. “It’s going to become part of your operating system.”
Brokers Must Communicate Requirements
Ruke ended the session with a clear takeaway for brokers: communicate your shipper’s insurance requirements to your agent. If you don’t, you risk failing audits or losing freight.
“The most valuable use of your insurance policy is to meet your customer’s expectations,” Ruke said. “And if your agent doesn’t know what those expectations are, they can’t write the policy to match.”
Palmer echoed that sentiment and urged attendees to stop viewing insurance as just a cost to manage. He emphasized that it should be seen as a tool to protect relationships and revenue.
“This isn’t just about how much you pay. It’s about how well your policy protects your business,” Palmer said. “And that only happens when your coverage matches the way you actually operate.”
