What Is Motor Truck Cargo Insurance? Coverage, Cost & Claims

What Is Motor Truck Cargo Insurance? It’s the inland-marine policy that covers your legal liability for a customer’s freight while it’s in your care, custody, and control—typically for collision, fire, theft, or overturn.

The truth is, while Motor Truck Cargo (MTC) insurance might have a lower cost compared to your other policies, it’s arguably the single most important coverage for protecting your relationships with shippers and brokers.

A mishandled cargo claim can shatter the trust you’ve worked so hard to build and tank your business.

The Underrated Hero Protecting Your Client Relationships

Let’s be real: overlooking the details of your MTC policy is one of the riskiest gambles you can make.

Think of it this way. If one of your trucks gets into an accident, your auto liability policy steps in to handle the other party’s damages. While significant, that claim doesn’t directly threaten your relationship with the customer whose freight was on board.

But what happens if that customer’s cargo gets damaged, or worse, stolen? If your MTC policy doesn’t respond correctly, that relationship is instantly on the line. No other insurance you purchase has such a direct impact on your business relationships.

Why MTC is More Than Just a Commodity

Simply grabbing a cheap, bare-bones policy to check a box on a broker’s contract is a recipe for disaster. Those policies are often riddled with massive gaps in protection, leaving you exposed when you can least afford it.

Not all cargo policies are created equal. A solid policy provides broad coverage that actually addresses the real-world risks your team faces every single day.

Your Motor Truck Cargo policy is more than just insurance; it’s a direct reflection of your commitment to your clients. A strong policy says you take responsibility for their goods seriously, while a weak one suggests you’re willing to gamble with their assets.

MCS-90 ≠ Cargo Coverage

The MCS-90 is an endorsement on your auto liability policy that guarantees payment of final judgments for public liability—bodily injury, property damage, and environmental restoration—arising from the use of a CMV.

It does not insure freight or pay cargo claims. Cargo losses require a separate Motor Truck Cargo policy (and any needed endorsements like reefer breakdown). Verify your cargo limits, sub limits, and exclusions—don’t rely on MCS-90 for cargo. 

Key Coverage Areas to Scrutinize

A standard, no-frills policy might only cover basic events like a collision or fire. But what about the stuff that really keeps you up at night? The most common and costly sources of claims are often found in the fine print.

A quality MTC policy will explicitly cover threats that can cripple your fleet. For a deeper dive into one of the biggest risks out there, check out our guide on preventing cargo theft, which outlines strategies that go hand-in-hand with great insurance.

At the end of the day, this coverage is all about protecting your reputation. When a claim happens—and it will—having the right insurance partner ensures a smooth process that keeps your client happy and preserves that business relationship for the long haul.

Why No Two Motor Truck Cargo Policies Are The Same

When you’re shopping for truck insurance, it’s easy to think one policy is pretty much the same as the next. That’s a dangerous assumption, especially with Motor Truck Cargo (MTC) coverage. This isn’t like your standard auto liability policy. MTC insurance is written on Inland Marine policy forms, which gives insurance companies a ton of freedom to write their own rules, set their own conditions, and pile on the exclusions.

What does that mean for you? It means the policy from Company A can be night-and-day different from Company B’s, even if the price tag looks the same. MTC insurance is very much a “get what you pay for” type of coverage. Chasing the lowest premium can leave your business wide open to a devastating loss. For a deeper look at what drives your overall insurance costs, check out our insights on commercial truck insurance rates.

The Importance of a Broad Coverage Form

The backbone of any solid MTC policy is having a broad coverage form. That’s just insurance-speak for a policy that clearly and directly protects you from the real-world stuff that happens out on the road. You can’t just assume you’re covered.

A cheap policy might only kick in for a collision or a fire. But a true broad form policy gets specific about the perils you actually face, including:

• Theft: Protection against one of the most common—and costly—ways cargo disappears.
• Water Damage: Covers losses from rain, floods, or other unexpected water incidents. This is extremely important for flatbed operations. 
• Temperature Change (by endorsement): Covers spoilage from mechanical/electrical breakdown of the reefer unit; driver error, delays, or poor loading are typically excluded unless you buy broader spoilage terms.
• Collision and Overturn: This is the basic, foundational coverage for any accident.

Think about what your fleet hauls—electronics, groceries, building materials. It’s all high-value and often time-sensitive. With the industry wrestling with inflation and shaky freight demand, making sure your cargo is properly insured has never been more important. Read more about how the economy impacts motor truck cargo insurance.

You have to read the fine print on any Motor Truck Cargo policy. The difference between a well-written policy and a cheap one becomes painfully obvious during a claim—and by then, it’s too late.

Because these policies aren’t standardized, the devil is truly in the details. One policy might have a strict exclusion for cargo left in an unattended vehicle. Another might be more forgiving. Some might cover theft by an employee; many others won’t. This is exactly why you need an insurance partner who gets trucking and can help you find a policy that actually protects your business and your relationships with your customers.

Navigating The Carmack Amendment And Your Liability

If you’re going to protect your business and keep your clients happy, you first have to get a handle on your legal liability. Any time you haul freight across state lines, a federal law known as the Carmack Amendment takes over and spells out your responsibility from the second you sign the Bill of Lading (BOL).

At its core, this law saddles you with what amounts to strict liability. This means you’re on the hook for the full value of any goods that get lost or damaged on your watch. It’s a heavy burden, but the law isn’t entirely one-sided. It gives you a few powerful defenses to protect yourself from claims that aren’t your fault.

To really dig into the details, check out our complete guide on how the Carmack Amendment impacts your operations.

The Most Powerful Defense Your Team Has

One of the most crucial defenses you have is also one of the easiest to miss, and it all comes down to what happens at pickup. How often does a shipper load, lock, and seal a trailer before your driver even gets there? It happens all the time. So how can your team be held responsible for the condition of freight they never even laid eyes on?

Legally, they are. But they can protect your company with four simple words.

You have to train your team to use the “Shipper’s Load and Count” (S,L & C) notation on the BOL every single time they can’t physically inspect the cargo. This one small action is a huge carrier defense under the Carmack Amendment.

SLC shifts loading/packaging issues back to shipper, but not if a separate carrier negligence caused loss.

When your team member signs with “S,L & C,” they are making a legal statement. They’re confirming they received a sealed container, but they have no idea about the quantity or condition of the goods inside. This simple act can shift the liability for damages caused by bad loading right back where it belongs: with the shipper.

When you’re looking at your own cargo policy, it’s not just about what it costs. You have to weigh the price, the terms, and the actual coverage to see if it truly protects you from this kind of liability.

As the visual shows, a cheap policy with weak terms and flimsy coverage is no protection at all.

How S,L & C Works In The Real World

Let’s play this out. Your driver picks up a sealed trailer packed with electronics and signs the BOL with “S,L & C.” When the trailer arrives, the receiver opens it up and finds a bunch of damaged items. It turns out the shipper didn’t secure the pallets correctly, and the whole load shifted.

If that S,L & C notation wasn’t on the BOL, you’d likely be paying for the entire loss. But because your driver did their job correctly, you now have a rock-solid defense. You can argue the damage was caused by the shipper’s negligence, not yours. This simple step can save you from a huge claim and helps keep your customer relationships intact by making sure the right party is held accountable.

To give you a clearer picture, there are five main defenses you can use under the Carmack Amendment.

Key Carrier Defenses Under The Carmack Amendment 

• Act of God  You’re not liable for damage from a natural disaster (e.g., hurricane, tornado) that was truly unforeseeable and couldn’t be prevented.
• Act of a Public Enemy  This covers losses caused by military forces of a hostile nation. It’s rare but is a recognized defense.
• Act of the Shipper  This is where S,L & C comes in. It covers damage caused by the shipper’s own errors, like improper loading or insufficient packaging.
• Act of Public Authority If a government agency seizes or damages the freight (e.g., quarantine, customs inspection, road closure), you are not responsible. 
• Inherent Vice of the Goods  You’re not liable if the goods spoil or degrade on their own due to their natural properties, like produce ripening or metal rusting. 

Knowing these defenses—and training your team to use them—is just as important as having the right insurance policy. It’s about building layers of protection to shield your business from costly claims.

Decoding Common Policy Exclusions and Pitfalls

The real value of your Motor Truck Cargo (MTC) policy is hiding in the fine print. Since these policies are built on non-standard Inland Marine forms, the exclusions section is where an insurance company can really dial back your protection. Getting a handle on these potential traps before a claim happens is absolutely essential.

A cheap policy might look great on paper, but it’s often riddled with exclusions that can leave you completely exposed when something goes wrong. You have to know exactly what isn’t covered so you can either find a better policy or take other steps to manage that specific risk.

Common Exclusions You Must Watch For

Think about the real-world situations your team faces every single day. Does your policy actually cover them? Here are a few of the most common—and costly—exclusions you need to dig into on any MTC policy you’re considering.

• Unattended Vehicles: This is a huge one. Many policies will flat-out deny a theft claim if the vehicle is left unattended, even for a quick meal break. You need to look for specific language about locking requirements and exactly how long a vehicle can be left alone. Coverage may be restricted unless warranty conditions (locked, forcible entry, max time) are met—check your form.
• Employee Theft & Dishonesty: You trust your team, but what happens if an employee is involved in a theft? Most policies exclude any loss that stems from employee dishonesty, leaving you to foot the entire bill. Ask for an employee dishonesty extension if available; otherwise consider a crime policy.
• Refrigeration Breakdown / Temperature Change: For reefer operations, this is everything. A basic policy will almost always exclude spoilage from a reefer unit malfunction. To be protected, you need a specific endorsement that provides “Reefer Breakdown” or “Temperature Change” coverage.

The trucking industry is already dealing with some serious headwinds, from rising premiums to record-high cargo theft. Because of this, insurers are tightening their policy terms, making it even more important to understand what you’re signing up for.

Asking the Right Questions Before You Buy

Don’t wait for a claim denial to find out what’s actually in your policy. When you’re reviewing a quote, you need to be direct and ask your insurance agent pointed questions about these common pitfalls.

When you’re trying to navigate potential disputes or claim denials tied to policy exclusions, understanding insurance bad faith can be incredibly important. A denied claim isn’t always the final word, especially if the policy language was ambiguous or misleading.

At the end of the day, your goal is to find a policy that lines up with your real-world operations. If you are hauling high-value electronics, you need a policy with rock-solid theft provisions. Doing this kind of homework ensures your MTC policy is actually worth the premium you pay. For more on what your partners and customers expect, our guide on UIIA insurance requirements provides some great context.

How To Choose The Right Motor Truck Cargo Insurance Partner

Picking a motor truck cargo insurance policy isn’t just about finding the lowest premium. It’s about finding a true partner who will have your back when a claim threatens to wreck your relationship with a customer. The right partner gives you more than a piece of paper—they bring expertise, real support, and services that actively protect your business.

First thing’s first: look for a broad, clearly written coverage form. You need a policy that spells out exactly what it covers in plain English. Think about the real-world perils your fleet faces—collision, water damage, temperature damage, and theft. Vague language or a long list of exclusions are huge red flags. A well qualified and experienced truck insurance agent is worth their weight in gold here. 

Check out this short video on current truck insurance pricing trends: 

Beyond The Policy Itself

A great insurance provider offers more than just coverage; they offer services that make a massive difference in a crisis. A dedicated claims team that actually understands the trucking industry is a game-changer. These folks get the pressures you’re under and can process claims efficiently, helping you salvage your relationship with the shipper or broker.

Another huge plus is finding a carrier with its own internal cargo theft prevention and recovery team. If they don’t have one in-house, check if they have strong partnerships with law enforcement cargo theft task forces or respected vendors like Verisk/CargoNet. Those resources can be the difference between recovering a stolen load and taking a total loss.

While competition is heating up in the cargo market, a low price doesn’t mean you’ve found a good partner. The best carriers invest heavily in their claims handling and recovery services—something the cheap policies just can’t afford to do.

Reputable Providers And Those To Avoid

Not all insurance carriers are built the same. For a deeper dive, check out our guide to the best trucking insurance companies. In general, you’ll find solid, reliable coverage from providers like:

• Markel
• AGCS (Allianz)
• Travelers
• Sentry
• Great West
• Northland

On the flip side, you should be extremely cautious with policies from Lloyd’s of London. Their MTC coverage is often loaded with very restrictive terms. Wordings vary widely by syndicate, so be sure to scrutinize the policy exclusions and warranties very carefully regardless of the market. They should only be used if there are literally no other coverage options available.

Choosing a stable, reputable partner is far more important than saving a few bucks on your premium. Your real goal is to find a partner whose policy and services will protect your business and your reputation when it truly matters.

Motor Truck Cargo Insurance FAQs

At My Safety Manager, we believe that strong safety practices and smart compliance are the bedrock of a profitable trucking company. Protecting your assets and your client relationships starts with knowing your risks. Our services help you build a culture of safety that reduces claims, lowers insurance costs, and keeps you focused on the road ahead. Learn more about how we can help your fleet stay compliant and safe.