Broker Best Practices in Limiting Risk
A successful broker understands that limiting risk is critical to the success of their operations. From contracts to proper carrier vetting, a simple mistake can expose you to significant financial and reputational loss.
Most of us feel we understand the exposures, but do we fully comprehend where those exposures come from? Insurance coverages like Contingent Liability, Contingent Cargo and Errors & Omissions can give the feeling of “I’m protected.” But is that true?
Obviously, you don’t have control over many of the risks you face — and you can’t avoid exposure and risk completely — but you can minimize it.
To address our customers’ concerns about the risks they’re being exposed to, we hosted a recent webinar to address these concerns.
Brett McGinnis, Executive VP and co-Practice Leader for . and David Pasco, Senior Account Manager with Roanoke Trade, addressed how:
- Different types of insurance common in the brokerage industry are often misinterpreted
- To minimize your direct exposure to loss associated with carrier vetting
- To understand common contract mistakes between a broker and carrier can be avoided
- You can gain confidence in your operation while building stronger business relationships with your clients through risk minimization
One particular type of insurance known as “Shipper’s Interest” is gaining traction as a solution to the dilemma many brokers face over risk. This particular solution puts the broker in control of a claim in the event of damage to their client’s cargo.
Contingent and standard motor carrier liability policies place the claims process in the hands of a carrier who may be too busy or unwilling to follow through. A broker is then put in the unenviable position where the shipper may assume it’s the broker’s responsibility — leaving them with the option of arguing with their own client that it’s not actually their responsibility — or paying the claim out-of-pocket to preserve the business relationship.