Freight broker insurance has entered a full-blown pricing crisis, with excess liability coverage costs rising between 50% and triple digits and even primary coverage climbing sharply in the double digits — all since a pair of legal shocks hit the market this spring. The turmoil is forcing brokers to rethink coverage limits, vendor technology relationships, and renewal strategies ahead of what analysts expect will be a prolonged inflationary environment.

How the disruption unfolded

The market disruption moved through three distinct phases, according to Thom Albrecht, a veteran freight transportation analyst who discussed the dynamics during FreightWaves' SONAR Market Update. The first phase was "total chaos" following the Montgomery Supreme Court decision on May 14, which exposed brokers to motor-carrier-style liability — a sweeping shift for intermediaries that arrange freight between shippers and trucking companies without operating trucks or employing drivers, and whose insurance programs were long built around that distinction. A brief calm in June ended abruptly on July 23, when the C.H. Robinson verdict — a $135 million judgment against one of North America's largest freight brokers — rattled underwriters once again.

"We've seen two underwriters exit the market, basically backing the paper over in London," Albrecht said. "So there's gonna be fewer options, a very inflationary environment, and there's gonna be more questions that are asked of freight brokers than ever before as they go through their renewals."

London's excess-and-surplus-lines market has long been a key source of high-limit capacity for U.S. transportation risks, so retrenchment there ripples directly into American placements.

Primary and excess coverage both climbing

On primary coverage — the first $5 million of freight broker auto liability, or FBAL — Albrecht said increases are running in the "middle" double digits, well above 10% but short of 90%. The picture for excess or surplus coverage above $5 million is far worse. Smaller brokers with gross revenues of $30 million to $40 million that were paying roughly $10,000 a year for coverage could now face bills of $30,000 to $40,000. Larger brokers seeking excess capacity above $5 million are confronting increases of 50% to 60% at the low end and triple-digit hikes at the top.

"The word to use is it's a total frenzy right now," Albrecht said, describing the post-verdict insurance environment for freight brokers.

Underwriters pulling back capacity, not just raising prices

Albrecht described one large brokerage customer that had $20 million in coverage, cut it to $15 million to improve its renewal position, and then secured additional capacity after the Robinson verdict — ending up at $40 million to $50 million. The cost increase on that expanded program, he said, was "way more than they would have ever envisioned four or five months ago."

Brokers that bundle cargo and auto liability with a single underwriter face compounding pressure, since cargo books have also turned unprofitable because of rising theft and fraud claims. Splitting cargo and auto liability coverage across different underwriters is one approach brokers are weighing.

Inside the C.H. Robinson verdict

The C.H. Robinson case revealed details that help explain the size of the jury award, Albrecht noted. An attorney who reviewed the transcript told him the jury was shown video of an accident victim trapped in a burning vehicle. Separately, a webinar Albrecht attended flagged that the driver had disabled his camera and GPS before the crash — a disclosure that could complicate Robinson's appeal.

The jury also found the driver to be a "borrowed employee" of Robinson in part because he had downloaded the C.H. Robinson app, a legal theory that carries significant implications for how brokers deploy their own technology with carrier partners. The borrowed-employee doctrine is a common-law agency concept under which a business can be held responsible for a worker it does not directly employ. How Robinson's appeal unfolds, and whether other courts adopt similar reasoning, are now central questions for a sector recalibrating its liability assumptions.

The CAD standard and the broader freight cycle

Albrecht said the goal for every freight broker navigating the new liability landscape is to achieve what he called the CAD standard: processes that are consistent, auditable, and defensible.

Beyond insurance, he sees the freight cycle itself turning favorable for carriers, with a potential "supercycle" — defined as a recovery lasting more than two years — possible if regulatory enforcement continues to tighten. He noted that the last five trucking recoveries each lasted between 18 and 24 months, making any extension beyond that threshold historically unusual. On the rate side, spot and contract rates are converging, with the gap between them below $0.66, a signal of further upward pressure ahead.

Source: FreightWaves