What is Intermodal Insurance & Who Needs It?

intermodal insurance

The commercial transportation industry is comprised of many parts, each with its own unique contribution to world economies. Freight carriers are an essential component of global commerce, bringing goods from manufacturing and production centers to retail establishments. What if a freight carrier uses more than one transportation method – how is cargo protected? Intermodal insurance is the solution. In this guide, we will explore this unique insurance coverage and how it can protect freight companies against a wide range of transportation risks.

Cargo: Complexities in Transportation

When cargo is shipped from manufacturing and production centers to end users, it often takes a convoluted journey using more than one transportation mode. This is referred to as intermodal freight transportation. As an example, think of a cargo ship loaded with 40-foot containers in a Chinese port:

  • Containers are delivered to the port via truck or rail.
  • Once the ship arrives at a destination port, containers are offloaded onto truck trailers or flatbed rail cars.
  • Upon arrival at distribution centers, containers are often transported on trucks to their final destination.

During this journey, the cargo itself is not handled directly; it remains within the protective confines of the containers. The cargo and the container must be insured to protect against liability exposures, thus necessitating intermodal insurance.

Is Intermodal Insurance Required?

Motor carriers that haul containers from ports to distribution centers face unique risks and may be required to obtain suitable insurance protection. These motor carriers are typically required to purchase what is known as a Uniform Intermodal Interchange and Facilities Access Agreement (UIIA) to enter ports or rail yards. The UIIA is part of a comprehensive port security system established and monitored by the U.S. Department of Homeland Security and the Intermodal Association of North America (IANA).

Many motor carriers lease the trailers used to haul standardized shipping containers as well, requiring them to obtain insurance coverage designed to protect the containers if they are physically damaged or lost during transport. In addition to intermodal insurance, carriers might be required to carry:

  • Hired and non-owned insurance
  • Trailer interchange insurance

The UIIA has imposed specific requirements for motor carriers. Under the requirements, truckers must carry:

  • $1,000,000 in auto liability coverage, including hired auto
  • $1,000,000 in general liability coverage
  • Cargo insurance based on limits set by equipment providers.
  • $30,000 trailer Interchange
  • Truckers Uniform Intermodal Interchange Agreement

To ensure adequate coverage for motor carriers, working with an insurance company experienced in intermodal freight transportation is a must. Without the right insurance, motor carriers face significant financial risks as well as the inability to enter port or rail facilities. Intermodal insurance protects container freight and equipment every step of the way from manufacturing and production centers to ports, rail yards, and distribution hubs.

About Western Truck Insurance Services

Western Truck Insurance Services is a commercial truck insurance agency with roots dating back to 1954. We have evolved into a highly respected, professionally managed, truck and transportation insurance brokerage. The hallmark of our organization is our desire to provide unparalleled service. We go way beyond what you expect to receive from an insurance brokerage. Equipped with state of the art automation, Western Truck Insurance can provide you with lightning fast truck insurance quotes, customer service, Insurance certificates, and coverage changes. Contact us today at (800) 937-8785 to learn more!