Cargo insurance vs. motor truck cargo legal liability

Who buys each one, and for whom

Motor truck cargo legal liability is bought by the motor carrier. It covers the carrier’s legal liability for loss to covered property while it is in the carrier’s care, custody or control, as that liability is set by a bill of lading, contract of carriage or shipping receipt.

Cargo insurance bought by the shipper or owner works the other way. IRMI describes transit coverage as inland marine coverage on the insured’s own property while it moves over land. The owner insures its own goods, so the claim doesn’t depend on the trucker being legally liable.

Side by side

• Who buys it: Motor truck cargo legal liability (carrier’s policy): the trucking company. Shipper’s or owner’s cargo insurance (owner’s policy): the shipper or owner of the freight.
• What it protects: Carrier’s policy: the carrier, for the freight in its care. Owner’s policy: the owner’s own goods in transit.
• What triggers payment: Carrier’s policy: the carrier being legally liable under the bill of lading or contract of carriage. Owner’s policy: a covered loss to the owner’s property.
• How much can be owed: Carrier’s policy: what the carrier legally owes, which a written released value can cap, up to the policy limit. Owner’s policy: the value and limits the owner insured.
• Defenses that matter: Carrier’s policy: Carmack defenses, such as an act of God, can leave the carrier owing nothing. Owner’s policy: the owner’s policy wording and exclusions decide the claim.
• Federal filing: Carrier’s policy: FMCSA requires cargo security only from household goods carriers and household goods freight forwarders; for carriers the forms are a BMC 34 certificate with a BMC 32 endorsement, or a BMC 83 surety bond. Owner’s policy: no FMCSA filing.
• Household goods moves: Carrier’s policy: the mover owes full value protection unless the shipper waives it in writing. Owner’s policy: a mover may offer it on top, covering loss above the mover’s liability.

What makes each one pay

Carrier liability comes from the Carmack Amendment, 49 U.S.C. 14706. A carrier must issue a receipt or bill of lading, and the receiving carrier, the delivering carrier and any other carrier over whose route the freight moved are liable to the person entitled to recover under it for the actual loss or injury to the property.

The Supreme Court laid out the burden in a 1964 Carmack Amendment case over a rail shipment, Missouri Pacific R. Co. v. Elmore & Stahl. The shipper shows the goods were delivered in good condition, arrived damaged, and the amount of the loss. The carrier then has to prove it wasn’t negligent and that the damage came from an act of God, the public enemy, the shipper’s own act, public authority, or the inherent vice or nature of the goods. If it does, the carrier owes nothing and its cargo policy has nothing to pay.

Why carrier liability can fall short of value

Section 14706(c) lets a motor carrier set rates that limit its liability to a value the shipper declares in writing or electronically, or agrees to in writing, if that value is reasonable under the circumstances. Household goods moves arranged and paid for by the householder are carved out of this rule. Carriers also can’t allow less than 9 months to file a claim or 2 years to sue after a written denial.

Then there is the policy itself. In its 2010 cargo rule, FMCSA pointed out that Carmack makes the carrier answer for the loss regardless of deductibles or exclusions in its cargo policy unless the shipper agreed to limit or waive liability. If the policy excludes the commodity or the limit is too low, the shipper may be collecting from the trucking company itself. When I set up a carrier’s cargo coverage, I start with the freight it hauls and the limits its contracts require.

The household goods exception

An FMCSA final rule published June 22, 2010 and effective March 21, 2011 ended the requirement for most for-hire motor common carriers of property and freight forwarders to carry cargo insurance in set minimums and file proof; household goods motor carriers and household goods freight forwarders kept it. Under 49 CFR 387.303T(c), a household goods motor carrier needs security of $5,000 for household goods on any one vehicle and $10,000 for losses at any one time and place, filed with and accepted by FMCSA before it operates in interstate or foreign commerce. 49 CFR 387.405 sets the same cargo minimums for household goods freight forwarders.

For the move itself, 49 CFR 375.201 sets full value protection as the mover’s normal liability: replacement value of lost or damaged goods, up to the declared value of the shipment. If the shipper waives that in writing, liability falls to the Surface Transportation Board’s released rates. A mover may sell the shipper liability insurance only on a shipment released at no more than 60 cents per pound per article and must hand over a policy or other evidence of it.

Brokers, contracts and reading the fine print

Federal law defines a broker as someone other than a motor carrier who arranges truck transportation for pay. A broker isn’t the carrier and doesn’t hold the carrier’s cargo policy. For the broker’s side, see contingent cargo insurance and freight broker insurance.

If you rely on a carrier’s cargo policy, read the policy, not just the certificate. Oregon’s state risk office tells state agencies that hire carriers to check policy exclusions to confirm their property is covered and to set limits high enough to replace, repair or recover what is in transit.

Common questions

Sources

• 49 U.S.C. 14706 (Cornell LII): liability of carriers under receipts and bills of lading
• 49 U.S.C. 13102 (Cornell LII): definitions of broker, household goods and motor carrier
• Missouri Pacific R. Co. v. Elmore & Stahl, 377 U.S. 134 (1964) (Cornell LII)
• 49 CFR 387.303T (eCFR): minimum limits, including (c) household goods motor carrier cargo liability
• 49 CFR 387.301T (eCFR): surety bond, certificate of insurance, or other securities; (b) household goods motor carriers, cargo insurance
• 49 CFR 387.313T (eCFR): forms and procedures (BMC 32, BMC 34, BMC 83)
• 49 CFR 387.405 (eCFR): freight forwarder limits of liability
• 49 CFR Part 375 (eCFR): household goods consumer protection rules (375.201, 375.303)
• Federal Register, June 22, 2010 (75 FR 35318): FMCSA final rule, Cargo Insurance for Property Loss or Damage, effective March 21, 2011
• IRMI glossary: transit coverage
• Oregon DAS Risk Management: trucker coverage insurance clauses

General information about motor carrier cargo liability and cargo insurance as of October 2026, not legal advice; 49 U.S.C. 14706, 49 CFR Parts 375 and 387, your bill of lading and the policy wording control. Coverage depends on underwriting and the terms, conditions and exclusions of the policy actually issued.