Freight Brokers Face Major Insurance Gap in Trailer Leasing

A critical compliance gap has emerged in the freight brokerage industry: freight brokers entering the trailer leasing business are carrying inadequate insurance coverage without realizing it. An audit by Centerline Insurance Company found that every single certificate of insurance reviewed at a major trailer leasing company failed to cover the leased trailers, despite brokers clearing the leasing company's onboarding process. This exposure creates dual liability risks: maintenance obligations typically fall on the lessee (broker), meaning equipment failures can directly implicate the broker in accidents, and providing equipment moves brokers beyond their traditional role as transportation arrangers into equipment ownership and stewardship.

Brokers are compounding the problem by relying on motor carrier commercial auto policies that exclude unlisted trailer VINs and may lapse without notification. The article emphasizes that contingent insurance policies, while cheaper, offer narrow coverage and low limits that leave brokers dangerously exposed. Beyond insurance, brokers must implement documented trailer maintenance schedules and visual inspections, though driver inspections cannot detect imminent bearing failures or other hidden defects.

Post-Montgomery ruling litigation has expanded liability exposure to include equipment lessors themselves, creating a multi-layered risk environment that requires dedicated trailer-leasing policies and robust compliance protocols.