While there are many things for Freight Brokers to consider when contracting with Motor Carriers, one important part of your due diligence is to ensure the carriers with whom you contract have the proper Federal Motor Carrier Safety Administration (FMCSA) authority. It’s also important that your Motor Carriers carry the appropriate lines of insurance coverage.
Without question, this is one of the most basic and fundamental of priorities you may have for your Freight Brokerage business. Your Motor Carrier should be appropriately licensed, authorized and insured to protect the loads in question. It is essential to call the Motor Carrier’s insurance provider directly to verify the coverage that is listed on the Certificate of Insurance that you are provided.
There are many unfortunate instances in the industry when Freight Brokers are provided with a fake certificate from a fraudulent source. The bottom line is that it is your responsibility as a Freight Broker to contact the insurance agent/office to verify that the relevant insurance coverage is properly in place. You may also use the FMCSA Licensing and Insurance public page to search the authority status for any Motor Carriers you contract with. It is encouraged that you seek advice from qualified transportation legal counsel when preparing your due diligence and related strategies.