Starting Monday, March 21st, many carriers will no longer be obligated to purchase cargo insurance, terminating the 1935 Motor Carrier Act.
With the exception of household goods carriers and freight forwarders, who will still be required to carry the insurance, the rule, published last June, will abolish the current $5,000 minimum per claim.
According to the Federal Motor Carrier Safety Administration (FMCSA), most carriers obtain policies that are well above the $5,000 minimum requirement, with most having a $50,000 to $100,000 liability, truckersnews.com notes. Road Scholar Transport, a leading LTL and TL carrier, is one of these, with a $100,000 cargo liability policy available for viewing at http://www.roadscholar.com/certifications.php.
Although most carriers will no longer be required to carry the insurance, they certain have the option to continue their policies, which the FMCSA believes they will continue to do “because their customers require it,” an article in DC Velocity notes.
According to Transportation & Logistics Council Inc.’s Attorney Raymond Selvaggio, carriers should still be required to carry a certain amount of cargo insurance, believing that terminating all mandatory requirements would “weaken the already fragile system of protection available for transportation service providers” and open “up the marketplace to new entrants that are financially unstable” (http://www.dcvelocity.com/articles/20110314cargo_insurance_mandate_to_end_march_21/).
Unless Congress interferes, which, as of right now, there have been no objections, the rule will go into effect on Monday; however, Road Scholar will continue to provide its customer’s with cargo insurance and the utmost care and safety of your freight.
Do you think that there should be a minimum requirement of cargo liability insurance that carriers must carry?