It is important for everyone to not only know the answers to these questions but also understand the WHY those questions are being asked:
What is an affiliated entity and why do insurers need to know if we are brokering loads to an affiliated entity?
Answer: An Affiliated Entity is any other trucking, freight brokerage, freight forwarding or transportation entity that has common ownership with the insured. Typically losses are excluded for loads being brokered to affiliated entities– as they have their own coverage. Specifically a trucking company is required to indemnify the freight broker for any and all losses.
Why do insurers need to know the Total Gross Billed to Shippers – ($ Revenue) and not the net revenue?
Answer: Policies are rated on gross revenue as reported on financials, not net revenue (which is unacceptable). A freight broker typically earns 10 – 20% of the gross load value and insurance policies are rated on a gross basis, not a net basis. Reporting the net revenue would cause a policy to be miscalculated.
What is the difference between Truck Broker Liability (TBL) versus Contingent Auto Liability (CAL)?
Answer: TBL coverage is primary coverage protecting the truck broker. CAL coverage is contingent coverage predicated on the carrier or the carrier’s insurance not paying or responding, and thereby triggering coverage. TBL is the best industry coverage. More information is available on another post shown here:
Why do insurance applications ask for the current premium?
Answer: To save time and to make certain that a competitive offer is available. Insurance companies would like to win your business. Success rates for finding quality insurance are higher when current premium information is available. Many insurance companies require this information.
Why is the application asking if we fine carriers?
Answer: Fining carriers that do not follow FMCSA guidelines could result in adverse judgements and higher insurance claims payout. Fines indicate control and therefore implied responsibility. It is better to not do business with a carrier that does not follow FMCSA guidelines then to impose fines.