Supreme Court Ruling Opens the Door to New Lawsuits Against Freight Brokers & Most Aren't Insured for It

Truck accident victims may now have a new party to hold accountable, and new reporting shows that party often has no insurance to cover the claim.

In May, the U.S. Supreme Court ruled unanimously in Montgomery v. Caribe Transport II, LLC that freight brokers, the companies that arrange for a truck to haul a shipment, without owning the truck themselves, can be sued under state law for negligently hiring an unsafe trucking company. The case involved a man who lost his leg after being hit by a truck operated by a carrier with a documented history of safety violations. The broker who arranged that load, C.H. Robinson, argued federal trucking law shielded it from responsibility. The Court disagreed, 9-0.

That ruling is still working its way through the courts. Just four days after the decision, a federal appeals court cited it to revive a previously dismissed broker lawsuit. And trade press covering the freight industry says the real story now is what comes next: brokers, it turns out, are largely uninsured for exactly this kind of claim.

The only federal financial requirement for a freight broker is a $75,000 surety bond, which exists solely to guarantee carriers are paid, not to cover injury or wrongful-death claims. There is no federal requirement that brokers carry liability insurance. Meanwhile, the median "nuclear verdict" (a jury award over $10 million) in trucking cases has climbed to $36 million. Some brokers do voluntarily carry contingent liability coverage; many, especially smaller operations, do not.