Contingent, Gap, Spike, and Excess – Cargo Insurance Explained


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

The fact is, not all standard MC insurance policy forms are created equal. There may be unexpected exclusions when it comes to coverage of loss or damage. Your carrier insurance coverage form may have also changed since the last time you reviewed it without your knowledge.

Your standard coverage typically will not cover certain loss or damage scenarios such as “Acts of God”, unattended vehicle, or theft. Your standard insurance may also exclude many commodities you currently move on a regular basis.
You may need another type coverage for your cargo in order to protect your P&L and your client relationships. But what type do you need? You’ve probably heard about spike, contingent, excess, or even gap insurance. 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 is exactly what it sounds like – it’s contingent upon the standard MC insurance policy failing. As a matter of fact, you can’t even file a claim with contingent insurance until it’s already been denied by the standard policy. It depends on the carrier to be diligent in reporting damage, communicating with the adjuster, insurance company, etc. If that carrier drags their feet on the process, Brokers can 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 generally a good position to be in 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, or Spot Insurance

These types of insurance cover nearly everything, and many are specially designed for higher-value loads, but costs can be very high – much higher than you actually need to cover your cargo. You will need to get a quote, which can be a long process. The claims processing time can be substantial, and again the Broker is put in a non-primary position in the event of a claim.

CargoShield “All-Risks” Insurance

CargoShield is a flat-rate, transactional “all risks” insurance for just $12 per load. It was created to help you remove the “is my load insured” question by having the broadest coverage terms in the industry, and doing it with one simple form. It takes only minutes to cover one or multiple loads by uploading an excel document to the gocargoshield.com website with a drag-and-drop option.

And while you hope you’ll never have to file a claim, you can 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. You’ll also preserve your relationship with your client, avoiding what can often become an adversarial situation – potentially losing your client.

CargoShield puts the Broker in a “Primary Position” in the event of a claim. The Broker is in control of the claims process who as a team has a goal of processing your claim in 30 days or less.

When it comes to additional insurance coverage for your cargo, make sure you make the decision that makes the most sense for your load – and your business relationships.

Visit gocargoshield.com to learn more about this game-changing solution to help you strengthen your client relationships and give your brokerage the edge over its competition!