Why "Additional Insured" is a Sugar Pill
Many brokers and shippers require an “Additional Insured” endorsement to feel protected, but this is often an “insurance sugar pill”—it provides a sense of security without adding actual benefit.
* Automatic Protection: Standard ISO policies already include a “Who Is An Insured” provision that protects anyone held vicariously liable for the motor carrier’s conduct.
* The “Designated Insured” Advantage: This ISO endorsement is the broadest form available and confirms the broker/shipper is already covered under the standard policy language.
* Less is Not More: Most custom “Additional Insured” endorsements actually provide less protection than the standard unendorsed ISO policy.
The Vetting Truth: COIs vs. 91X Filings
* Don’t Rely Solely on the FMCSA Site: Insurance companies often cancel 91X filings annually as a standard procedure during renewals. This can lead to a misleading “Pending Cancellation” status online even when coverage is being renewed.
* Trust the COI: Always require a Certificate of Insurance (COI) directly from the retail agent to verify the actual limits and coverage currently in force.
Critical "Watch-Outs"
- Cargo Liability: Brokers cannot be “Additional Insureds” on cargo policies because they never have physical “care, custody, and control” of the goods.
- Own Negligence: No endorsement will cover a broker or shipper for their own direct negligence, such as “Negligent Selection” of a carrier.
- Loss Payee: Shippers are already loss payees by definition if their owned cargo is damaged. Adding them as an “Additional Insured” on a cargo liability policy can actually limit their coverage.
- Primary Coverage: The motor carrier’s policy is already primary for owned autos, meaning the broker or shipper is covered as an insured for vicarious liability without needing extra complex endorsements.
Co-Authored by Rob Moseley and Tommy Ruke