What you need to know about Insurance and Third-Party Shippers

How should you insure yourself when you use third-party shippers or driveway contractors to transport your trailers and trucks? What should you be looking for If you’re hiring people to drive your truck to the dealership or to its final destination?

In my opinion, customer pickup is best. The customer comes to your location, they pick up the trailer, they pick up the truck, they drive it off a lot and head home or to their business and your insurance coverage responsibility ends.


We all know that many businesses sell through a network of dealers and manufacturers have to get their products to those dealerships. Many of our clients self-perform this delivery. They have the trucks, they have filings, they have motor carrier, they have all these things needed to transport their trucks and trailers to their destination or to the dealership. Setting up a transportation company is a little more complicated than it sounds and can produce its own set of headaches. But if you’re in an area where you don’t have access to third-party shippers, it is certainly something that you should consider, and we’d be glad to talk with you about how to set that up.

Verify Minimum Coverage

If you are using third-party shippers, always, always, always verify that they have insurance coverage.  You want to make sure that they have a minimum, the very bare minimum of a million dollars in combined single limit. You don’t want to find someone that’s hooking up to a personal truck, or has 100,000 or $250,000 in coverage. You want to make sure they have at least a million and we highly recommend that they also have umbrellas and higher limits because lawsuits can get really big, really fast, and you could be brought in from a vicarious liability standpoint. So, start with a million, but ask for even more if you feel like you have the bargaining power to do so.

Cargo Liability

The next coverage you need to require is cargo liability. You want to make sure that the shippers have enough cargo liability coverage in the event that your product is damaged while it’s in their care, custody or control. Whether they get in an accident, or it gets stolen, you want to make sure that the coverage is in place for the cost of those vehicles. And as a backup, if you are the actual manufacturer, I would highly recommend getting what’s called a contingent cargo policy. It’s a policy that covers you if the third-party shipper does not have enough insurance coverage. It’s a way to hedge your bet.

Have the Right Contracts

Lastly, you want to make sure you have your contracts in place with the motor carriers to make sure that they’re doing everything that they are required to be doing.

If you have more questions, would like to talk about motor carriers and third-party shippers, want to talk about setting up your own logistics company to self-deliver your products or you want to talk about driveway contractors, let’s setup a meeting to discuss your situation. You can use the button below to schedule a call or call us directly at (478) 449-5928.