Do you need Cargo Insurance?
Cargo insurance covers freight in transit, and the form you need depends on your role. Motor truck cargo covers a carrier’s legal liability for freight it hauls for others, while shipper’s interest cargo covers a business’s own goods directly, without the carrier having to be at fault. It may respond to perils such as collision, theft, fire, and water damage.
When goods move by truck, a lot can happen between pickup and delivery: an accident, theft, fire, or cargo shifting and being damaged. We help California carriers and shippers put the right cargo coverage in place.
What does cargo insurance cover?
- Motor truck cargo (for carriers): a trucker’s legal liability for loss or damage to the freight they are hauling for others, typically required by contracts and brokers.
- Shipper’s interest cargo (for businesses): direct coverage for your own goods in transit, regardless of who is at fault.
- Common perils such as collision, overturn, fire, theft, and water damage, subject to policy terms.
- Loading and unloading, and often goods at a terminal or in temporary storage in transit, subject to terms.
Who needs it? Trucking companies and owner-operators (motor truck cargo), and manufacturers, wholesalers, distributors, and retailers who ship their own products (shipper’s interest). If you rely on a carrier’s coverage alone, a limitation-of-liability clause or a non-negligence loss can leave your goods unprotected.
How we help: we review with you whether you need carrier liability, shipper’s interest, or both, review your contracts and commodity types, and set limits that reflect what you actually move. We coordinate with trucking, inland marine, and stock throughput so the policies hand off to each other at a defined point between transit and storage.
Cargo insurance in California, explained
Does California require cargo insurance to get a Motor Carrier Permit?
No. The Motor Carrier Permit under Vehicle Code section 34620 requires proof of liability insurance under section 34631.5: $750,000 combined single limit, or $300,000 if the carrier runs only vehicles under 10,001 pounds GVWR. Cargo insurance is not part of that filing. The only California carriers with a statutory cargo minimum are household movers, who must carry $20,000 of cargo insurance under Business and Professions Code section 19248 for their Bureau of Household Goods and Services permit. Everyone else carries cargo coverage because a shipper, broker or contract demands it. Our fleet insurance page covers the permit and the CHP rules in depth.
Does the FMCSA still require cargo insurance for interstate truckers?
Not for general freight. The federal agency eliminated the cargo insurance requirement and the BMC-34 filing for most for-hire property carriers and freight forwarders, effective 21 March 2011. Household goods carriers and household goods freight forwarders still file cargo security of $5,000 per vehicle and $10,000 per occurrence under 49 CFR 387.303. Shippers and brokers fill the gap by writing cargo limits into their contracts, which is why a carrier with no legal cargo minimum still gets asked for a certificate showing one.
What is the difference between motor truck cargo and shippers’ interest coverage?
Motor truck cargo is a liability form. It pays what the carrier is legally obligated to pay the shipper for loss or damage to goods in the carrier’s care, so the carrier must be liable before it responds. Shippers’ interest, sometimes called transit coverage, is a first-party property form the owner of the goods buys on its own freight. It pays on a covered peril without the owner having to prove the carrier was negligent, subject to the form’s perils, exclusions and limit, and the insurer may then pursue the carrier. An owner who relies only on the carrier’s policy inherits the carrier’s liability limit and its defenses.
How much is a trucker legally liable for my freight, and who decides?
For an interstate shipment, federal law governs. The Carmack Amendment, 49 U.S.C. section 14706, makes the carrier liable for the actual loss or injury to the property. It also lets the carrier limit that liability to a value the shipper declares in writing or agrees to in a written contract. For a California-only shipment, Civil Code section 2194 makes an inland common carrier liable for loss from any cause, with four exceptions. Those are inherent vice, an act of a public enemy, an act of law, and an irresistible superhuman cause. Commercial Code section 7309 then allows the bill of lading to cap that liability where rates depend on value and the shipper was offered a higher declared value. In both systems the bill of lading is the contract that sets the number, so read the released value before tendering.
How long do I have to file a cargo claim against a carrier?
For interstate freight, section 14706 bars a carrier from allowing less than nine months to file a claim and less than two years to sue after the claim is disallowed. The claim must be in writing, identify the shipment, assert liability and state a specified or determinable dollar amount under 49 CFR 370.3. The carrier must acknowledge it within 30 days and pay, decline or make a firm settlement offer within 120 days. For a California household move, the Bureau of Household Goods and Services page also sets nine months to file. Shippers’ interest coverage is bought partly because those deadlines and the paperwork sit with the shipper rather than an insurer.
Can I sue the trucking company under California law for damaged freight?
If the shipment crossed a state line, no. The Ninth Circuit holds that the Carmack Amendment is the exclusive cause of action for interstate shipping contract claims and preempts state-law claims for delay, loss, failure to deliver and damage to property. If the goods moved only inside California, state law applies: Civil Code sections 2194 to 2196 and Commercial Code section 7309 set the carrier’s duty and the room to limit it. Which system applies is decided by the route, not by where the contract was signed, and it belongs with your attorney.
What does a motor truck cargo policy usually exclude?
Terms that the declarations and endorsements control. Many forms carry an unattended vehicle or theft warranty that requires the truck to be locked, in a secured lot or attended before theft is covered. Refrigeration breakdown is excluded unless a reefer breakdown endorsement is added, usually with maintenance or unit-age conditions. Commodity exclusions or sublimits apply to high-theft goods such as electronics, tobacco, alcohol, pharmaceuticals and copper. The valuation clause pays invoice cost, not selling price, unless the form is changed. California has a dedicated CHP Cargo Theft Interdiction Program, and reporting a theft to it quickly is a practical condition of most claims. A carrier hauling listed commodities should have the endorsement in hand before the load is tendered, because brokers read the certificate for these terms.
Does a freight broker need cargo insurance?
Not by statute. A broker arranges transportation for compensation and is not a carrier, so it is not liable under the Carmack Amendment for the goods. Federal law requires the broker to hold $75,000 of financial security, a surety bond or trust fund, under 49 U.S.C. section 13906, which pays shippers or carriers if the broker fails to pay for transportation it arranged. The bond does not cover cargo loss. Contingent cargo is a separate policy a broker buys to respond if the hauling carrier’s cargo policy does not, for example because it lapsed or excluded the commodity.
What insurance does a California moving company need?
A household mover holds a permit from the Bureau of Household Goods and Services, which has regulated intrastate movers since 1 July 2018. Business and Professions Code section 19248 requires liability insurance of $250,000 per person, $500,000 per accident and $100,000 property damage, or a $600,000 combined single limit. It also requires $20,000 of cargo insurance for the life of the permit. The state’s maximum rate tariff builds basic protection of 60 cents per pound per article into the mover’s rates; a customer who wants more declares a value and pays for it. Movers are rated for workers’ compensation under WCIRB class 8293, furniture moving, while general trucking payroll is class 7219.
How do you get a cargo quote from us?
Start a business insurance quote and tell us whether you haul for others or ship your own goods, and the commodities and their values per load. Add the radius, whether any loads are refrigerated, and the cargo limit your contracts or brokers require. Some cargo placements we can write directly and quickly. Others go to underwriting for approval, or need a wholesale market, and those take longer. Either way you know before you decide, and the transit and storage policies are built to hand off to each other at a defined point.
Statutory figures current as of September 2026; the federal rules apply to interstate shipments and the Civil Code rules to California-only shipments. Form descriptions refer to standard ISO wording; no form text is reproduced.
Cargo coverage is the freight half of a commercial trucking program, and goods that move by means other than truck fall under inland marine. The wider program is on our business insurance page.
