Breaking

Freight Brokers Face Hidden Liability Gaps in Trailer Leasing Operations

Freight brokers entering the trailer leasing business are exposing themselves to significant liability risks that standard contingent insurance policies do not adequately cover. According to Andy Kuchar, President of Centerline Insurance Company, an audit of certificates of insurance at a trailer leasing company revealed a critical compliance failure: every single broker policy on file failed to provide coverage for leased trailers. This occurred despite brokers clearing the company's onboarding requirements, suggesting compliance staff accepted documentation without proper insurance review.

Maintenance obligations create acute exposure for brokers. Brake or bearing failures resulting in accidents can create direct liability for brokers as equipment lessees. This distinction moves brokers beyond their traditional role as transportation arrangers into equipment providers, triggering additional legal exposure.

Insurance specialists warn against relying on motor carrier commercial auto policies as a solution. Such policies typically require every trailer VIN to be listed, and leased equipment often goes unrecorded. Premium-financed carrier policies can also lapse without broker notification.

Brokers should obtain dedicated trailer-leasing insurance policies specifically designed for this exposure. Policies containing the word "contingent" warrant particular scrutiny.