This page provides a glossary of insurance terms and definitions that are commonly used in the insurance business. New terms will be added to the glossary over time. These definitions represent a common or general use of the term. Some words and/or phrases may be defined differently by other entities, or used in a context such that the definition shown may not be applicable.
- AIR CARGO:
Freight that is moved via air transportation.
- AUTO LIABILITY (AL):
Insurance that protects an insured from claims arising from injury or damage to others in the event of an accident.
- BILL OF LADING (BOL):
A transportation document that services of the contract of carriage along with any other conditions between a shipper and a transportation provider.
- BOBTAIL INSURANCE:
Owner-operator insurance specifically for the tractor that is common and typically required under a lease agreement.
- BONDED WAREHOUSE:
A warehouse approved by the United States Treasury Department and under bond for observance of revenue laws. The warehouse is used to store product until duties are paid and good are released properly.
Break-Bulk: The separation of a consolidated load into multiple smaller shipments.
- CARGO INSURANCE:
(Also called freight, shipping, or marine insurance) A commercial trucking insurance policy designed to cover cargo during transit. It is important to verify exclusions when purchasing a policy.
- CARRIER LIABILITY:
A common carrier or trucking company will be held liable for all shipment loss, damage, and delay other than an act of God, public authority/enemy, shipper, or the product itself.
A company in the business of transporting products or people by land, sea, or air.
A specialized form of equipment in order to carrier an intermodal container.
Common Authority: Trucking companies who provide for-hire truck transportation to the general public.
- CONTRACT AUTHORITY:
Trucking companies who provide for-hire truck transportation to specific, individual shipper, based on contractual agreements.
The act of combining multiple (two or more) shipments in order to achieve a low cost of transportation.
- CONTAINER ON FLATCAR (COFC):
A form of rail transportation where a container is loaded onto a flat railcar for transportation.
A type of shipment container commonly used for ocean and rail transportation. The standard size is 40’ in length although there are additional sizes such as 20’ available as well.
- CONTINGENT CARGO INSURANCE:
A contingent insurance policy often held by freight brokers that will defend against and pay settlements per the terms of a policy if the primary cargo policy held by the trucking company fails to pay a claim. It is uncommon for this type of policy.
- COST, INSURANCE, FREIGHT:
A type of term used in freight forwarding that designates that the seller is responsible for the cost of freight charges and marine insurance on ocean shipments.
A type of trucking company focused on efficient delivery of HVP (high-value products). This typically consists of expedite shipments and can include smaller shipments as well as FTL (full truckload).
- CUSTOMS BROKER:
A type of company that works with buyers/sellers in dealing with customs related to import/export freight.
The act of moving goods through a warehouse to final delivery.
Transportation from origin to destination
Transportation from origin to port of entry
- DRAYAGE CARRIER:
A trucking company specializing in the transportation of goods via ground a short distance. Generally, drayage occurs most often to/from rail yards and ports when transporting containers.
- DRY VAN:
A common type of freight trailer utilized by commercial trucking companies. Typically, 48’ or 53’ in length and fully enclosed Dry Van truck insurance
- EXCESS MOTOR TRUCKING CARGO:
A commercial trucking policy that provides additional coverage designed to apply in the event that primary cargo coverage has been exhausted in the event of a claim where the trucking company is found negligent.
- EXCESS INSURANCE POLICY:
Coverage that is very similar to Umbrella in that it pays when primary coverage has been exhausted. The primary difference between the two is that excess follows form to confirm exactly to the coverage of the underlying policy.
The movement of cargo out of the origin country.
A type of trailer that consists only as a floor and is not enclosed
Federal Motor Carrier Safety Administration – A federal entity established within the Department of Transportation for the purpose of regulating commercial trucking activities in the US. The FMCSA issues USDOT and motor carrier numbers and monitors safety compliance.
- FOB ORIGIN:
Buyer takes possession of over at origin
- FOB DESTINATION:
Buyer takes possession of cargo at destination
- FOR HIRE CARRIER:
A person or company that provides transportation or cargo or passengers in exchange for compensation.
- FREE TRADE OR FOREIGN TRADE ZONE (FTZ):
A government-approved area set aside for holding goods that is duty-free and awaiting customs clearance.
- FREIGHT BROKERAGE:
A company in the business of buying and selling transportation services, sometimes also referred to as a 3PL or third-party logistics provider.
- FREIGHT FORWARDER:
A business that services as an intermediary between transportation providers and a shipper for the movement of international shipments.
- FULL CONTAINER LOAD (FCL):
An international ISO standard referring to one full container load (20’ or 40’).
- FULL TRUCKLOAD (FTL):
Trucking companies who move shipments from point-to-point that consume the entire amount of trailer space.
- GROSS VEHICLE WEIGHT (GVW):
The total weight of a tractor or semi
- HIRE & NON-OWNED LIABILITY:
Coverage for bodily injury and property damage caused by a vehicle you hire (including rental and loaner cars) or coverage caused by non-owned vehicles (owned by others including employees).
The movement of cargo into the destination country.
A practice or arrangement by which a company or government agency provides a guarantee of compensation for specified loss, damage, illness, or death in return for payment of insurance premium.
- INSURANCE MARKET:
An insurance company with the ability to underwrite business.
- INSURANCE QUOTE:
The act of getting an insurance quote from a licensed insurance agent.
- INTERLINE AGREEMENT:
An agreement often established between motor carriers to exchange equipment during the course of transit or with permission to move equipment on behalf of the other trucking company.
- INTERMODAL (IMDL):
The transportation of freight use two on more modes of transportation (i.e. trucking, rail, air, ocean).
- INTERMODAL MARKETING COMPANY (IMC):
A type of logistics provides that resells intermodal capacity to customers.
- INTERNATIONAL FUEL TAX AGREEMENT (IFTA):
Fuel tax agreements are required by the federal government and filed through each respective. These are not required for vehicles under 26,000 lbs.
- INTERSTATE TRANSPORTATION:
The transportation of property or people over state lines.
- INTRASTATE TRANSPORTATION:
The transportation of property within the boundaries of a state.
- LEASE AGREEMENT:
An agreement between an independent owner-operator and a truck company to run permanently under the authority of the trucking company.
- LESS-THAN-TRUCKLOAD (LTL):
A transportation method for smaller shipments consist than is less than a full truckload but larger than a typical small parcel shipment.
The detail coordination of a complex operation involving transportation services, people, and/or facilities.
- LOSS RUNS:
Forms issued by insurance companies to track the date, type, and descriptions of insurance losses of the insured
- MANAGING GENERAL AGENT (MGA):
A business appointed by an insurer to solicit business from agents/agency.
- MCS 90:
An endorsement to a commercial trucking or umbrella policy that proves compliance with federal regulations.
The method of transportation for cargo (i.e. rail, truck, air, ocean)
- MOTOR CARRIER:
A company in the business of transporting products or people by land.
- MOTOR CARRIER AUTHORITY:
A requirement through FMCSA that companies who operate as for-hire carriers, transport passengers for interstate commerce, or transport federally-regulated commodities in interstate commerce.
- MOTOR TRUCK CARGO INSURANCE:
Commercial transportation insurance to cover the commodity or cargo hauled by a motor carrier.
- MOTOR VEHICLE REPORT (MVR):
Referred to as a driving record, this is issued by each state and shows information related to your driver license including traffic violations
- NATIONAL MOTOR FREIGHT CLASSIFICATION (NMFC CODE):
A tariff utilized to classify and describe commodities into like classes.
- NON-TRUCKING LIABILITY INSURANCE:
An endorsement that can be added to a policy that provides coverage when the truck is not under dispatch and being utilized for personal use.
- ON-HOOK COVERAGE:
Insurance to cover a car in the process of being towed by a tow truck.
- OWNER OPERATOR:
A driver who owns and operates his/her own truck. Owner-operators typically operate under the motor carrier authority of a trucking company under a lease agreement.
- PARTIAL SHIPMENT:
A shipment that occupies a portion of a trailer and leaves room for additional cargo. Any shipment on the truckload would remain on the trailer from origin to destination.
A specific risk or cause of loss covered by an insurance policy.
- PHYSICAL DAMAGE INSURANCE:
A type of commercial insurance policy that covers the truck and/or trailer if damaged in an accident. Must be a peril covered by the insurance policy
Transportation from port of entry to destination
- REEFER OR REFRIGERATED TRAILERS:
A type of trailer fully enclosed that is temperature controlled and designed to keep perishables refrigerated.
- SEMI-TRUCK INSURANCE:
Commercial insurance designed for trucking companies
- SMALL PARCEL:
A form of transportation-focused around the delivery of packages (generally through FedEx, UPS, or USPS.
The party that prepares and tenders cargo for shipment.
- STRAIGHT TRUCK:
Trucks where the driving compartment and trailer are permanently attached and considered one single unit.
- SUPPLY CHAIN:
The sequence of processes involved in producing and distributing a product.
- TRAILER ON FLATCAR (TOFC):
A form of rail transportation where a trailer is loaded onto a flat railcar for transportation.
- TRANSPORTATION RISK:
The inherent risk involved with a transportation or logistics activity.
- TRANSPORTATION RISK SPECIALISTS:
Transportation experts with knowledge and experience in the trucking and logistics marketplace. It is recommended you speak with an insurance agency focused around this area when purchasing trucking insurance to ensure you understand your needs and coverage.
- TRUCKING AUTO LIABILITY:
Auto liability for commercial trucking insurance that is required by the FMCSA. The minimum coverage amount is $750,000.
- TRUCK INSURANCE:
Commercial auto insurance for motor carriers
- UMBRELLA INSURANCE:
Insurance coverage that increases the limit of a primary policy should a catastrophic event ever occur. It is common for this to be written in excess of Auto Liability (AL), General Liability (GL), and Workers Compensation (WC) along with other policies. This coverage would kick-in wants the primary limit has been fully exhausted.
A facility utilized for the holding of goods on behalf of another party.
Business who coordinate between agents and surplus lines insurers for specific kinds of insurance. They often have the ability to underwrite business themselves on behalf of the markets they represent.
- WAREHOUSE LEGAL LIABILITY:
Coverage for property that the insured takes possession of and stores at their facility
- WORKERS COMPENSATION INSURANCE:
Coverage for insured employees should they be injured on the job including death benefits, medical benefits, and loss of ability.