The freight Broker insurance gap is now real

Today, the Supreme Court told every freight broker in America that they can be sued for negligent carrier selection. Montgomery v. Caribe Transport II was unanimous. Nine to zero. The FAAAA preemption shield that the brokerage industry had relied on for decades is gone. So…what’s next? Well, insurance of course.

Anytime liability and exposure rear their heads, insurance becomes a necessity to protect the rest of society. The only federal financial responsibility requirement for a freight broker in the United States is a $75,000 surety bond. That bond does not cover tort liability. It does not respond to a personal injury judgment.

It does not pay out when a jury decides that a broker was negligent in selecting a carrier whose truck killed someone. It exists for one purpose only: to ensure that motor carriers and shippers get paid when a broker defaults on its freight payment obligations.

Notice I said “United States” because many overseas brokers remain largely shielded from accountability. Seventy-five thousand dollars. A surety bond. Against a legal landscape where the median nuclear verdict in trucking cases is $36 million and climbing. The broker surety bond requirement lives in 49 U. S. C. Section 13906 and 49 CFR 387. 307.

MAP-21 set the current $75,000 floor in 2012, replacing the previous $10,000 requirement that had been in place since the Motor Carrier Act of 1980.

FMCSA tightened enforcement of the bond requirement with a final rule that took full effect January 16, 2026, closing loopholes around BMC-85 trust funds that had allowed some brokers to operate with junk assets and no real liquidity. Those reforms were necessary and overdue.

Carriers had been getting burned for years by brokers who defaulted on payments while operating on paper-thin financial backing. The tighter bond enforcement protects carriers from non-payment. It does nothing to protect the public from the consequences of a broker’s negligent selection of a carrier.

The bond “shall ensure the financial responsibility of the broker by providing for payments to shippers or motor carriers if the broker fails to carry out its contracts, agreements, or arrangements for the supplying of transportation by authorized motor carriers.” Contracts. Agreements. Arrangements. Payment obligations. Not tort liability.

Not negligent hiring. Not the $36 million judgment a jury just handed down because the broker put a load on a carrier with a conditional safety rating and a driver who had not slept in 22 hours. There is no federal requirement for a freight broker to carry bodily injury liability insurance. None. Not a dollar.

Some brokers carry contingent auto liability and contingent cargo insurance. I did when I brokered freight. Many of the larger operations do. These are policies that respond when a carrier’s own insurance is exhausted, disputed, or nonexistent, and the broker faces a claim arising from the carrier’s operations.

Contingent auto, in particular, is the policy that would respond to a negligent-hiring claim post-Montgomery. Contingent auto has never been a federal requirement. It has been a business decision. A risk management choice.

Something the sophisticated brokers carried because they understood the exposure, and something the unsophisticated brokers skipped because nobody made them buy it and the FAAAA preemption defense meant they probably would never need it. That calculation just changed. Permanently.

The brokers who already carry contingent auto and cargo coverage are sitting in a defensible position. They have a policy that responds. They have documentation that they took the exposure seriously. They can tell a jury that they not only vetted the carrier but also carried insurance against the possibility that their vetting was insufficient.

That is a powerful litigation posture. The brokers who do not carry those policies, and that is a lot of brokers, are now exposed in a way they have never been.

They have $75,000 in surety bond coverage that does not respond to tort claims, no liability insurance, and a Supreme Court opinion that says state courts can hold them accountable for negligent carrier selection. The first time one of those brokers gets named in a catastrophic crash case, the math will become very clear very fast.

Here is why the insurance gap matters more now than ever. The American Transportation Research Institute published its updated trucking litigation analysis in late 2025. The findings should scare every broker, carrier, and insurer in the freight industry. Truck-tractor tort case filings grew at an average annual rate of 3. 7 percent between 2014 and 2023.

The median nuclear verdict, defined as a jury award exceeding $10 million, reached $36 million in 2022. That is approximately 50 percent higher than the median nuclear verdict in 2013. The share of verdicts exceeding $50 million increased by 6. 4 percentage points over that same period. The average trucking verdict between 2020 and 2023 was $27. 5 millio