Moving Company Insurance Gaps: Cargo, Storage, Crime

Coverage gaps at a moving company can open wherever a promise to a customer and a policy limit do not match: a cargo limit below the value of a full truck, storage that the cargo form does not reach, and goods in your care that general liability usually excludes. Others come from crime coverage that often protects mainly the company's own money, from delay costs, and from helpers who were never on the payroll. This guide is for buyers who have the seller's policies in hand and want to know where to test them first.

The short answer

Test the cargo limit first: compare it with the value of a full truck and with the liability you promise customers. Full value protection is the default level for interstate household moves, and it is a promise by the mover, not an insurance policy.
Storage is its own exposure. Many property policies do not cover goods held for others (a bailee exposure) unless the policy is written for that purpose, so confirm which form covers goods inside your warehouse.
General liability usually excludes property in your care, custody or control. Where goods in transit end and the customer's building begins depends on the form and the facts.
Crime coverage often protects the insured's own property, so a customer's missing jewelry or a faked deposit refund may need specific terms.
Some gaps are in people and contracts, not forms: helpers paid as contractors, van line chargebacks and penalties. Ask about each rather than assume.

Where do the gaps hide in a moving company's program?

A gap is not a sign the seller's broker did a poor job, since the program may have fit the seller's way of running the company. The table lists ten places to test and what to ask for. Check your own forms.

Ten places to test a moving company's policies
Gap	How it shows up	How to spot it	What to ask for
Cargo limit below the promise	A full truck is worth more than the limit per vehicle	Compare the limit per vehicle and per loss with the values on a typical full load	A limit sized to your biggest loads, or a written decision to carry the difference yourself
Storage not reached	Goods stored for weeks may sit outside the transit coverage and the property form	Read the warehouse form and the cargo form's definition of covered location	A warehouse legal liability or bailee form with a limit that fits the contents
High-value, fragile or unattended loads	A piano, artwork or a loaded truck parked overnight	Look for sublimits, exclusions and conditions on theft, disappearance and parked vehicles	Named terms for these items, and written value declarations from customers
Goods in your hands that general liability usually excludes (care, custody or control)	A claim over goods in your hands or over packing work	Read the exclusion in the general liability form and its exceptions	Written confirmation of which policy answers each type of loss
Delay and extra costs	A customer pays for hotels and storage after a late delivery	Check whether the cargo form pays delay or consequential costs	A clear answer from the carrier, and a review of your contract terms
Crime limited to your own property	A customer says a crew member took jewelry; a fake deposit refund request works	Check whether customers' property is covered and the limit for tricked-employee fraud	Terms for client property if offered, plus payment call-back controls
Helpers and day labor	A helper paid as a contractor is hurt	Compare payroll records with who was on each job	Counsel's view on classification, certificates, and an audit conversation
Claims a van line pushes back to you under the agent agreement	A larger carrier assigns a damage claim back to you	Read the agreement's indemnity and insurance terms against your policies	Confirmation that liability assumed by contract is covered
Equipment that travels	Pads, ramps and lift gear are stolen from a truck	Check property and equipment forms for items away from premises	A schedule or floater if the form does not reach them
Umbrella not scheduled over the right policies	A serious crash exceeds primary auto limits	Read the schedule of underlying insurance and which policies are listed	Written confirmation of which policies sit under the umbrella and what it does not sit over

If you only have an hour, start with cargo limit, storage and the general liability exclusion (rows 1, 2 and 4). They sit closest to the goods that make a mover's claims large.

General liability also usually excludes most pollution, so ask about fuel and fluid spills at the yard.

Does your cargo limit match what you promise customers?

For interstate household goods moves, the federal rules make the mover liable for actual loss or damage, and full value protection is the default unless the customer waives it in writing for a lower per-pound released rate (the rule names 60 cents per pound per article). A mover's liability for high-value items can be capped at $100 per pound per article unless the customer notes such articles in writing. Moves that stay inside one state may fall to state rules, which differ, and a move can count as interstate depending on where the goods started. None of this is insurance. It is the liability the mover takes on, and the cargo policy is what may help pay for it.

The gap is the distance between the two. Put the customer contract template next to the cargo form and read four things: the limit per vehicle and per loss, the deductible, how losses are valued (replacement cost or actual cash value), and whether the form excludes the categories your crews handle. The federal cargo floor for household goods carriers, $5,000 per vehicle and $10,000 at one time and place in the rules text, is a regulatory minimum and says little about whether your limit fits a loaded truck. The pages that publish these amounts carry suspension and amendment notes, so confirm what is in force. See inland marine for how cargo and equipment forms are classified, and reviewing commercial auto as a new owner for the truck's own physical damage coverage.

What happens to goods in your warehouse?

The first guide in this set explains why the policy on your building may not reach customers' goods inside it. The gap questions are these. Does the cargo form cover goods in storage in transit (waiting for delivery), or only on the truck? Is there a warehouse legal liability or bailee form, and does its limit fit the contents? And how does the inventory compare with the values customers declared? One fire means many claimants sharing one limit, and business income coverage responds to physical loss to your own property, so ask how long you could stay closed.

Where does general liability stop and cargo coverage start?

A rough split: goods in your care, custody or control are usually a cargo or warehouse question, while damage to the customer's building and injuries to bystanders usually fall to general liability. The gap is the borderline cases, so ask the broker to say in writing which policy answers a scratched wall, a dropped box and a crushed shipment, and the same for packing and crating, where goods are in your hands before they reach the truck. See care, custody and control.

What does a loss look like when promise and policy disagree?

A hypothetical example. A fully loaded truck waits overnight in the yard for a morning delivery. A fire destroys the truck and everything on it. The load belongs to four households whose chosen valuations add up to $230,000. The cargo limit per vehicle is $150,000. The truck itself is financed and sits on auto physical damage, with the lender named as loss payee.

Four questions decide the outcome. First, is a loaded truck parked in the yard overnight "in transit" or "in storage" under the cargo form, and do any conditions apply to parked vehicles? Second, if the company promised full value, who pays the $80,000 above the limit? Third, how does the truck itself get paid, and does the lender's payment come first? Fourth, how long until the company can serve its other customers? The buyer who asks these on day three, not after the fire, can adjust limits or terms, or decide in writing to carry the difference. Any change depends on carrier underwriting.

What about theft, delay and fraud?

Crime coverage often protects the insured's own money and property. A customer's jewelry that goes missing from a packed box may be a cargo question (cargo forms vary on theft and mysterious disappearance, and some limit or exclude them) or a crime question, and the answer is in the wording. An employee theft endorsement, where one exists, may or may not extend to clients' property, so ask. See commercial crime and reviewing crime coverage as a new owner.

Deposit and refund fraud is a different gap. When an employee is tricked into sending money, for example a deposit refund to a new bank account for a customer who is not real, insurers call it social engineering. Some crime policies do not cover it unless they say so, and where they do, the limit is often lower than the rest of the policy. Funds transfer fraud for new owners explains the difference. A call-back rule for any change to bank details is a low-cost control.

Delay is the third. If a long-distance load arrives weeks late, whether the cargo form pays the customer's hotel and storage costs is a question for the form, not an assumption.

Which gaps come from people and contracts, not forms?

Some surprises sit outside the policy wording:

Helpers and day labor. A helper hired through an app and paid as a contractor who falls from a ramp is a workers' compensation question, and an auditor may treat that person differently than the seller did. Workers' comp and payroll for a moving company covers it.
Van line agreements. A mover that works as an agent of a larger household goods carrier may be bound by an agreement that assigns claims back to the agent, so ask for the agreement. Contracts, licenses and bonds for a moving company goes through it.
Hostage-load penalties. Federal law sets civil penalties for a knowing and willful failure to deliver a household goods shipment after the shipper tenders the required payment.

Whether any policy responds to such a penalty is a question for the insurer, in writing, and clear billing practices are the main control.

How do you test the program in the first two weeks?

Collect the full cargo, warehouse, general liability, crime and property forms with endorsements.
Ask the broker to run three losses through them, such as a dropped piano, a parked loaded truck and a missing box, and write down which policy answers each.
Put the customer contract template beside the cargo form and compare limit, deductible and valuation.
List what is stored, for how long, and at what declared values, and compare it with the warehouse limit.
Ask the crime carrier about client property and tricked-employee fraud.
Write down each gap you will close, each you will carry on purpose, and who approved that. Your lender and investors will ask.
For a second set of eyes, a Morrow review can run the three losses through your full forms and flag gaps, though carriers decide terms.

Keep reading

Frequently asked questions

Which coverage gap should I test first at a moving company?

Start with the cargo limit. Compare the limit per vehicle and per loss with the value of a full truck and with the liability you promise customers. It is the most direct way to see whether a single bad day could exceed the policy.

Does cargo coverage pay for goods stored in my warehouse?

It depends on the form. Some cargo forms address storage in transit and some do not, and goods held longer usually need a warehouse or bailee form. Ask the carrier in writing how the policy treats goods stored for several weeks.

Would the seller's crime policy cover a customer's missing jewelry?

Not necessarily. Crime coverage often protects the insured's own money and property, and coverage for clients' property is a separate term. A cargo form may address theft in its own wording. Read both before you assume either one responds.

My crew gouged a wall and crushed a couch on one job. Which policy pays?

It depends on the forms and facts. The wall is often a general liability question and the couch a cargo question, but where the line falls depends on your wording. Ask your broker to walk this exact loss through your forms in writing.

Can every gap be closed with more insurance?

Not always. Availability, price and terms depend on carrier underwriting, and some gaps are better managed with contract terms, controls or a decision to carry the risk. Ask your broker which gaps can be insured and what each would involve.

References

Just bought a business? Get your insurance reviewed.

Send Morrow the declarations pages, loss runs and key contracts you inherited. Morrow can review them against the business you bought, flag gaps and request quotes where it makes sense. Any new terms depend on carrier underwriting.

Request a review Check a contract

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This article is general information, not legal, tax or financial advice, and not a coverage determination. Coverage depends on the actual policy wording, carrier underwriting, your purchase agreement and your contracts. Ask your attorney and accountant about deal and legal questions.

Moving Company Coverage Gaps: 10 Places to Test the Seller's Policies