$10M Professional Liability (E&O) Insurance for Freight Brokers, Customs Brokers and Travel Firms

For freight brokers, customs brokers and travel firms whose client contract asks for $10M, Professional Liability (E&O) at that limit is uncommon and is usually built as a primary policy plus follow-form excess layers.

What does a $10M requirement mean for freight brokers, customs brokers and travel firms?

Professional Liability (E&O, for Errors and Omissions) covers claims that a mistake in your service cost a client money. Many travel agencies and customs brokers buy a form made for their trade, such as travel agent E&O or customs broker E&O. Check which form your contract accepts. A shipper's agreement might read:

• Per claim and aggregate: $10M/$10M is the most paid per claim and per policy year. How limits are written.
• Claims-made: Professional Liability almost always pays claims made while the policy is active, for work after its retroactive date (the earliest work date covered).
• Follow form: each excess layer should use the same terms as the primary. If your clause is silent on excess, confirm with the client that primary plus follow-form excess meets it.
• Three years after: in many cases you would keep the same retroactive date on every layer, or buy an extended reporting period (extra time to report claims after a policy ends) on each.

Who asks freight brokers, customs brokers and travel firms for $10M?

Client size usually drives it:

• Very large shippers with one standard contract for every broker and third-party logistics (3PL) company, which runs warehousing or shipping for others
• Large importers of regulated or high-value goods
• Occasionally, a very large federal program or the main contractors who work for it, with a negotiated, contract-specific requirement
• Global companies choosing a travel management company

How is $10M built?

A primary policy pays first. Each excess layer pays after the layers below run out. "$5M xs $5M" means $5M above the first $5M. The figure shows two ways to stack $10M. At $5M, one primary may be enough. At $10M, you usually need excess layers. See the $5M guide.

If one layer adds an exclusion, a claim could be paid at the bottom but not higher up. Every layer should share the same retroactive date, policy period and named insured (the business listed on the policy).

Most Professional Liability policies pay defense costs inside the limit, so legal bills use up the $10M. Defense outside the limit is uncommon.

Have a lower limit now? Request new quotes through Morrow for a new primary or excess layers, keeping your retroactive date and prior acts coverage (cover for work done before the new policy starts) where the market allows. Report any known incident to your current carrier before you switch.

Freight brokers often also need contingent cargo (covers lost freight if the trucker's cover fails) and contingent auto liability (covers a hired trucker's crash). A customs broker's E&O is separate from customs bonds, which guarantee duties to the government, not client claims.

What will underwriters ask for?

Carriers may ask for:

• An application with revenue or gross bookings by service
• The contract asking for $10M, including its indemnity section (where you agree to pay client losses)
• Your quality controls, such as carrier vetting or entry review
• Five years of loss runs (a report of past claims)

What affects the cost?

• Your type of work. Regulated imports and high-value freight can mean larger possible losses than leisure travel, which underwriters may weigh.
• The primary and the layers. The primary usually carries much of the cost because it pays first. Upper excess layers usually cost less per $1M.
• Claims history. Past claims can lower the limit offered or raise the price.
• Contract wording. Promises to pay a client's losses can go beyond what the policy covers. Underwriters may exclude or restrict coverage for them, or decline to offer the limit.
• Retention. This is the amount you pay first, like a deductible. A higher one usually lowers the cost.

Frequently asked questions

Can a small travel agency get $10M Professional Liability?

Sometimes, but it is hard. It generally means a small primary with excess layers. Morrow can help you find it.

Can my commercial umbrella count toward $10M Professional Liability?

Almost never. An umbrella usually sits above General Liability and auto, so you need excess Professional Liability. Read more on umbrellas.

Can a shipper or importer be named as additional insured on my Professional Liability?

Usually not. Professional Liability protects you against client claims, so naming a client does not fit. Clients often ask for a certificate of insurance (proof of coverage) that lists every layer. Check what your contract accepts.

Is $5M Professional Liability enough if my contract says $10M?

Usually not. If your contract says $10M, the total across the primary and all excess layers needs to reach $10M. Confirm with the client that primary plus follow-form excess meets the clause, then send Morrow the clause so it can request quotes for each layer.

This article is general information, not legal advice or a coverage determination. Coverage depends on the actual policy wording, carrier underwriting and your contract terms.