$1M Professional Liability (E&O) Insurance for Freight Brokers, Customs Brokers and Travel Firms

For freight brokers, customs brokers and travel firms whose client wants $1M: Professional Liability (E&O) may pay for a client's financial loss from your mistake, up to $1M per claim, depending on the policy.

What does a $1M requirement mean for freight brokers, customs brokers and travel firms?

Professional Liability (E&O, short for Errors and Omissions) covers claims that a mistake in your work caused a client a financial loss. Example (hypothetical): a customs filing with the wrong product code or a missed visa rule on a group trip. A typical clause:

• Per claim: the most the policy pays for any one claim. Here, $1M.
• Aggregate: here, $2M. A $1M/$1M policy would fall short of this sample clause.
• Claims-made: Professional Liability almost always pays only for claims first made while the policy is active. The work must also be after the retroactive date (the earliest work date the policy covers).

Who asks freight brokers, customs brokers and travel firms for $1M?

You will often see $1M from:

• Shippers and manufacturers signing broker-shipper agreements with freight brokers.
• Third-party logistics (3PL) companies and larger brokers that subcontract brokerage or logistics planning work to smaller firms and consultants.
• Importers and retailers hiring customs brokers to file entries and classify goods.
• Corporate travel buyers and schools choosing a travel agency or booking group tours.

$1M is a common ask for freight brokers, travel firms and customs brokers. Larger importers often ask for $2M instead, which usually means a higher primary limit or primary plus excess (see $2M Professional Liability for logistics and travel firms). For one profession, see $1M for freight brokers or $1M for travel agents.

How is $1M built?

At $1M, the limit is usually one primary policy (the policy that pays first). Excess layers (extra policies stacked above it) are rarely needed. Freight brokers and customs brokers usually buy a transportation intermediary or customs broker E&O form, not Miscellaneous Professional Liability. Travel agents usually buy a travel agent form. Tour operators who run trips usually need a tour operator form that also covers injury to travelers. Logistics consultants often buy Miscellaneous Professional Liability.

Freight broker contracts often also ask for contingent cargo (may pay for lost freight when the carrier's policy does not) and contingent auto liability (may respond if you are named in a truck accident claim). Those cover freight loss and truck accidents, not Professional Liability. General liability generally excludes auto-related claims. A commercial umbrella almost never covers Professional Liability (see Does a commercial umbrella cover Professional Liability?). Additional insured status (giving a client rights under your policy) is often not included on Professional Liability. Carriers differ, so check the policy. Many clients accept a certificate of insurance (a one-page proof of coverage) instead.

What will underwriters ask for?

An underwriter is the insurer's decision-maker on coverage. At $1M, they usually ask for:

• Each service you offer, with revenue, billings and largest clients.
• For freight brokers: how you vet carriers, the freight types you move, and your contracts.
• For customs brokers: entry volume, goods classified, and who reviews filings.
• For travel firms: destinations, group trips, and how you handle deposits and supplier failures.
• Prior claims, anything that could become a claim, and your current policy and retroactive date.

What affects the cost?

• Type of work. Work with higher dollar values and more complex filings can raise the price compared with simpler work.
• Volume and value. More loads, entries or trips mean bigger possible losses.
• Controls. Carrier vetting and second checks on filings can help.
• Claims history. Prior claims can raise the price or narrow options.
• Aggregate, retention and defense terms. $1M/$2M usually costs more than $1M/$1M. A higher retention (the amount you pay on each claim before the policy pays) usually lowers the premium.

Frequently asked questions

Do I need $1M Professional Liability (E&O) as a freight broker, customs broker or travel agent?

Usually when your contract, a client or your own risk review calls for it. Check each contract's insurance section and any license or state rules.

Does my customs bond or freight broker bond cover client claims?

Usually not. A bond protects the party it names, and the bond company often expects to be paid back. Professional Liability usually defends you when a client says your mistake cost them money.

Can a small travel agency get more than $1M in Professional Liability?

In many cases, yes, though options vary by form and by the work you do. Limits above $1M to $2M are often available from specialty carriers or brokers but usually need a full application and underwriting review. $3M and above is rarely found online. Morrow can help you find them.

I have a $1M/$1M policy and the contract asks for $1M/$2M. What now?

Ask Morrow to request quotes for a new $1M/$2M policy. Morrow can ask carriers to keep your retroactive date and prior acts coverage where the market allows. Keep your current policy in force until the new one starts. Report anything that could become a claim to your current carrier before it ends.

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.