Cargo insurance for Mexico shipments: who actually covers what

There is a conversation that happens after a loss, and it is always the same conversation. The shipper believed the freight was covered. The carrier’s liability turns out to be limited and well below commercial value. The broker’s bond turns out not to be cargo insurance at all. Nobody lied to anybody; three different instruments were all being called “insurance”.

It is a ten-minute conversation to have in advance and a very expensive one to have afterwards.

Three things, three different jobs

1. The broker’s surety bond

Every licensed property broker in the United States must maintain a surety bond or trust fund in effect for $75,000, under 49 CFR 387.307. That security exists to provide for payments to shippers or motor carriers if the broker fails to carry out its contracts, agreements or arrangements for the supplying of transportation by authorized motor carriers.

Read that again, because the wording is doing precise work: it secures the broker’s performance of its arrangements. It has nothing to do with your goods being damaged in transit.

2. The motor carrier’s cargo liability

The carrier transporting your freight carries liability for loss or damage while the goods are in its possession. That liability is real, and on domestic interstate movements it is shaped by federal law as well as by the bill of lading.

But it is a liability with limits and exclusions, not a policy on the commercial value of your goods. A carrier whose limit is well below the value of what is on the trailer is entirely normal, and it is your job — not theirs — to know the gap.

3. Cargo insurance

This is the thing most people mean when they ask “is it insured?”: a policy covering the goods themselves, subject to its terms, limits, deductibles and exclusions. It either exists for your shipment or it does not.

Why Mexico is treated separately

Cross-border movements involve several parties operating under different legal frameworks, and a shipment changes hands more often than a domestic one. Establishing clearly, before departure, who is insuring the goods removes the largest single ambiguity from the movement.

DCI’s position is stated on every relevant page of this site:

Mexico shipments must be insured by the customer unless cargo insurance is arranged by DCI Logistics LLC at the customer’s express request.

The default is that you insure the cargo. That default changes only when you ask us, expressly, to arrange it.

What “express request” means, and what it does not

An express request has to be made by you and has to be unambiguous. Selecting the corresponding option on a quote form does it. Saying so in writing does it. Assuming it, or having assumed it on a previous shipment, does not.

And then the part that matters most:

No form submission, automated acknowledgement or internal notification is confirmation of cover. If you have made a request and have not received written confirmation, ask — that is a sensible question and the right time to ask it is before the truck moves.

Practical questions worth asking

• What is the commercial value of what is actually on this trailer?
• What is the carrier’s liability limit for this movement, and how large is the gap?
• Do I have cargo insurance covering this lane, or did I have it on a different lane?
• If I have asked the broker to arrange cover, do I have written confirmation for this shipment?
• What are the policy’s exclusions — theft, temperature, unattended vehicle, specific territories?
• Who presents the claim, and what documentation do they need from me?

The last one is worth answering while nothing has gone wrong. Claims that get paid tend to be the ones where the delivery receipt was noted at the time, photographs exist, and notice was given promptly. Applicable time limits can be short.

This is not insurance advice

DCI is a licensed property broker, not an insurance broker or adviser. Nothing here is advice about what cover your business should carry. What we can do is be unambiguous about the default position, arrange cover when you expressly ask us to, and confirm in writing when it is in place.

Deciding what is adequate for your business is a conversation to have with your own broker or counsel — and worth having before the shipment, not after.