Contingent, Gap, Spike, & Excess — Cargo Insurance Explained


We all know that standard motor truck carrier insurance provides protection for your cargo, and by default, for your business. What you might not know is that standard motor carrier (MC) insurance may not be providing the coverage you think it does.

It’s a fact that not all standard MC insurance policy forms are created equal. There may be some unexpected exclusions when it comes to coverage of loss or damage. Not only that, but your carrier insurance coverage form may have changed without your knowledge since the last time you really reviewed it.

Standard coverage will typically not cover certain loss or damage scenarios such as “Acts of God,” unattended vehicle, or theft. Your standard insurance may also exclude many commodities that you currently move on a regular basis.

You may need another type of coverage for your cargo in order to protect your profit and loss (P&L) statements and client relationships.

What type of insurance can help with loss of cargo or damaged cargo situations that may not be covered by standard MC insurance?

You have likely heard about spike, contingent, excess, and gap insurance coverage. But what are they, and why should you consider them?

Contingent Insurance

Contingent insurance is purchased as an add-on to standard MC policies, and it is exactly what it sounds like – insurance that’s contingent upon the standard MC insurance policy failing. As a matter of fact, you can’t file a claim with a contingent insurance policy until it has been denied by the standard policy. So, it becomes dependent on the carrier to be diligent in reporting damage, communicating with the adjuster and the insurance company, etc. If the carrier is slow to move on any of those processes, brokers may be put in a difficult position with their clients. They may have to choose between eating the cost of the claim to satisfy their client or risk their business relationship. This is considered a “non-primary position” (not a great position for a broker in the event of a claim).

Most contingent policies will also follow all of the exclusions and non-coverages of standard MC policies.

Spike, Excess, Gap, Trip-Transit, and Spot Insurance

Spike, Excess, Gap, Trip-Transit, and Spot Insurance cover nearly everything, and many are specifically designed for higher-value loads. The problem is that costs can be very high – much higher than you actually need to cover your cargo, and you will need to get a quote which can be a lengthy process. The claims processing time can be substantial, and again, the third-party logistics provider (broker) is in a non-primary position in the event of a claim.

Truckstop.com “All-Risk” Cargo Insurance

Cargo Insurance is a flat-rate, transactional, “all risks” insurance for just $24 per load. It was created to help remove the “Is my load insured?” question by providing the broadest coverage terms in the industry and doing so with one simple form. It only takes minutes to cover one or multiple loads by uploading an Excel spreadsheet to our website and includes an easy drag-and-drop option. To simplify the process further, we recently added coverage as an option in the Truckstop.com load-posting process. Coverage is also available from within Truckstop.com’s TMS – ITS Dispatch!

And while it’s easy to hope you’ll never have to file a claim, rest assured that if you do, your claim will be handled by a professional claims team. That way you don’t have to spend hour after hour on the phone with your client, the carrier, and the insurance adjuster. It will also help you preserve business relationships with clients since you’ll avoid what can often become an adversarial situation (resulting in the potential loss of a client).

Cargo Insurance puts brokers in the primary position in the event of a claim. That means the broker is in control of the claims process and has a claims team with a goal of processing your claim within 30 days or less.

When it comes to additional insurance coverage for your cargo, feel secure in a decision that makes sense for the loads you need moved and your business relationships.

Visit Truckstop.com to learn more about this game-changing solution which will help strengthen client relationships and give your brokerage an edge over the competition!