Texas General Lines — Property and CasualtyCommercial LinesMedium
A client operates a regional trucking company. They are concerned about potential financial losses if one of their trucks, while hauling a customer's goods, is involved in an accident and the cargo is damaged. Which type of coverage would directly address the client's liability for damage to the goods of others while in their care, custody, or control?
- ANon-Owned Trailer Coverage
- BTrailer Interchange Coverage
- CBusiness Auto Physical Damage Coverage
- DMotor Truck Cargo Coverage
Show answer & explanationAnswer & explanation
Correct answer: D. Motor Truck Cargo Coverage
Motor Truck Cargo Coverage is specifically designed to protect truckers from their liability for loss or damage to the cargo they are transporting for others. This directly addresses the client's concern about damaged customer goods.
Why the other options are wrong
- A. Non-Owned Trailer Coverage protects the insured's liability for damage to trailers they do not own but are using, not the cargo being hauled.
- B. Trailer Interchange Coverage applies to trailers borrowed or exchanged with other truckers under a written agreement, not the cargo itself.
- C. Business Auto Physical Damage Coverage protects the insured's own vehicles, not the cargo they are hauling for others.
Motor Truck Cargo Coverage
Insurance that protects a motor carrier from their legal liability for loss or damage to cargo belonging to others while it is in their care, custody, or control during transit.
- Covers property of others being transported by the insured.
- Addresses legal liability of the carrier for cargo damage/loss.
- Typically includes specified perils or 'all-risk' depending on the policy.
Memory trick: Cargo on the 'Motor Truck' needs 'Cargo Coverage' for safe travels.