Operation Protect Your Load is specifically centered on “unlawful brokerage”.
In 2023, to protect motor from bad broker practices, FMCSA proposed five regulatory modifications to prevent dishonest business practices. These changes modify:
- Assets Readily Available
- Immediate Suspension of Broker/Freight Forwarder Operating Authority
- Surety or trust responsibilities in cases of broker/freight forwarder financial failure or insolvency
- Enforcement Authority
- Entities Eligible to Provide Trust Funds for BMC-85 Filings
You can learn more about each of these changes here: Bad Brokers Face Stricter Rules in 2025 that Protects Carriers
But little did we know that broker enforcement initiatives were coming even sooner.
Bad brokers is a serious issue
Fraud costs the entire industry roughly $1 billion a year and impacts all areas of the supply chain.
TIA members recently reported an average cost of $400K annually in losses because of fraudulent activity.
These situations involve a fraudulent entity posing as a motor carrier who takes the load and “re-brokers” it back out to another motor carrier with no intention to pay the motor carrier that delivers the load. In these situations, the fraudulent motor carrier is paid.
When it comes to Enforcement Authority, the changing broker rule implements requirements around suspension of a surety or trust fund provider’s authority in certain circumstances. Specifically, FMCSA will:
- Provide notice of the suspension to the surety/trust fund provider
- Then 30 calendar days for the surety or trust fund provider to respond before a final decision is issued.
- FMCSA is also adding monetary penalties and a statutorily mandated suspension in 49 CFR part 386, appendix B, for violations of the new requirements.
The compliance date for this provision is Jan. 16, 2025.
But broker enforcement is happening now in a different way.
What is Operation Protect Your Load?
FMCSA Enforcement Director Tom Liberatore revealed some details of an enforcement blitz under way called “Operation Protect Your Load”, the first general freight broker initiative of its kind focused on violations of FMCSA’s broker regulations.
This initiative is specifically centered on unlawful brokerage.
The operation focuses investigatory resources on broker entities with recent and repeated lapses in either insurance and bonding or recent and repeated lapses in authority.
For example, anything strange in terms of multiple applications for authority presents a red flag for investigators involved in the effort ongoing, helping focus resources.
If you are a broker, you may be wondering what the insurance requirements are. Let’s look.
What kind of insurance coverage do brokers need?
Today, brokers need a wider variety of protection that often includes:
- Truck/Freight Broker Auto, General Liability Coverage – Up to $5,000,000
- Professional (E&O) – Up to $1,000,000
- Contingent Cargo Liability – Up to $500,000
Truck Broker Liability is designed for truck brokers, along with trucking operations, that have brokerage authority. TBL is a hybrid primary liability policy that addresses the truck broker’s general liability arising out the ownership and use of a truck by the motor carrier of a brokered cargo move, in compliance with a written truck brokerage agreement.
It provides bodily injury and property damage liability coverage protecting the truck broker if legal action is taken because of a truck accident involving a motor carrier to whom they brokered a load.
General Liability is designed to respond to the liability a freight broker could assume other than liability to cargo or liability as result of a vehicle being driven. For example, a freight broker might be pulled into a lawsuit if third-party trucker or warehouse personnel was injured because of cargo being unloaded from their truck.
Errors and Omissions Insurance (E&O or professional liability) is designed to protect brokers from lawsuits that claim you made a mistake in your professional services and can help cover expensive court costs or settlements.
Contingent Cargo Legal Liability is designed to protect a transportation broker or freight forwarder against the liability assumed when deciding to move cargo for others. This provides coverage when a trucker’s primary motor truck cargo policy fails to assume the responsibility for cargo loss or damage.
Get a Complete Broker Insurance Quote today
Our Commercial Truck Insurance Specialists can help you get a broker insurance quote.
If you have any questions or concerns, please call us at 800.724.5523 or email info@cnsinsures.com.
