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Montgomery Ruling Sparks Insurance Crisis for Freight Brokers

The May Montgomery court decision removed liability protections for brokers, creating a grim insurance cost outlook. TD Cowen's transportation team flagged RXO, C. Robinson and Landstar as facing material premium inflation. One top-10 freight broker saw liability insurance triple upon renewal, with excess coverage costs jumping from $3 million to $10 million above $15 million primary layers. Large brokers broadly face mid-teens to mid-20s rate increases, according to the analyst. The insurance market has contracted sharply, with only approximately 10 underwriters willing to write broker auto liability coverage—a number expected to shrink further as exits accelerate. The combination of Montgomery fallout and recent major verdicts has created extreme market volatility for coverage beyond primary layers.