The Supreme Court has told freight brokers across the U.S. they face lawsuits for negligent carrier selection. Montgomery v. Caribe Transport II came down unanimously, 9-0, and it removed the FAAAA preemption defense the brokerage industry had relied on for decades.
That leaves brokers with a different risk picture. When liability expands, insurance moves from optional risk management to something close to survival capital.
The only federal financial responsibility requirement for a U.S. freight broker is a $75,000 surety bond. That bond does not cover tort liability, personal injury judgments, or a jury finding that a broker negligently selected a carrier involved in a fatal crash.
The bond has one purpose: to make sure motor carriers and shippers get paid when a broker defaults on freight payment obligations. Overseas brokers, by comparison, often remain much harder to reach.
So the number is $75,000. A surety bond, sitting against a litigation environment where the median nuclear verdict in trucking cases has reached $36 mn and continues to rise.
The broker surety bond requirement sits in 49 U.S.C. Section 13906 and 49 CFR 387.307. MAP-21 set the current $75,000 minimum in 2012, replacing the old $10,000 requirement created under the Motor Carrier Act of 1980.
FMCSA tightened enforcement with a final rule that took full effect on January 16, 2026. The rule closed loopholes tied to BMC-85 trust funds, which had allowed some brokers to operate with weak assets and little real liquidity.
Those reforms were needed and late. Insurers had spent years taking losses from brokers that defaulted on payments while operating with thin financial backing.
Tighter bond enforcement protects carriers from nonpayment. It does not protect the public from a broker’s negligent selection of a carrier.
The bond must ensure broker financial responsibility by paying shippers or motor carriers if the broker fails to carry out contracts, agreements, or arrangements for transportation through authorized motor carriers. That language deals with payment obligations.
It does not deal with tort liability, negligent hiring, or a $36 mn judgment after a broker placed freight with a carrier that had a conditional safety rating and a driver who had not slept in 22 hours.
Some brokers buy contingent auto liability and contingent cargo coverage. I carried those policies when I brokered freight, and many larger firms do the same.
Those policies respond when the carrier’s own insurance is exhausted, disputed, or absent, and the broker faces a claim tied to the carrier’s operations. Contingent auto is the policy most likely to respond to negligent-hiring claims after Montgomery.
Contingent auto has never been federally required. It has been a business decision, a risk management choice, and a sign of a broker that understood its exposure.
Less sophisticated brokers often skipped it because nobody forced them to buy it. The FAAAA preemption defense also made many assume they would never need it.
Brokers that already carry contingent auto and cargo coverage now sit in a more defensible position. They have a policy that responds, plus documentation showing they treated the exposure seriously.
They also gain a stronger litigation posture. In front of a jury, they get to say they vetted the carrier and carried insurance for the chance that vetting failed.
Brokers without those policies face a different reality. Many have only a $75,000 surety bond that does not respond to tort claims, no liability coverage, and a Supreme Court ruling allowing state courts to hold them accountable for negligent carrier selection.
The insurance gap matters more because trucking litigation has become more expensive. The American Transportation Research Institute released updated trucking litigation analysis in late 2025, and the numbers should worry brokers, carriers, and insurers.
Truck-tractor tort filings grew at an average annual rate of 3.7% between 2014 and 2023. The median nuclear verdict, defined as an award above $10 mn, reached $36 mn in 2022.
That figure is about 50% higher than the median nuclear verdict in 2013. The share of verdicts above $50 mn rose by 6.4 percentage points over the same period.
The average trucking verdict between 2020 and 2023 reached $27.5 mn. Thermonuclear verdicts, meaning awards above $100 mn, have grown at an extreme pace.
- In 2024, a St. Louis jury awarded $462 mn against trailer maker Wabash National in a fatal underride crash case. That total included $450 mn in punitive damages.
- In 2021, a Florida jury returned a $1 bn verdict against a carrier in a fatal crash. It remains the largest single trucking verdict in U.S. history.
ATRI found that in more than 80% of verdicts above $1 mn, non-medical damages such as pain and suffering ran up to 10 times higher than actual medical bills. The average verdict above $1 mn rose from $2.3 mn in 2010 to $22.3 mn in 2018.
The American Tort Reform Association has identified specific jurisdictions in these states as judicial hellholes.
Those venues combine plaintiff-friendly procedural rules, broad discovery, aggressive plaintiffs’ lawyers, and anti-corporate jury sentiment.
State courts cost trucking defendants more than federal courts. ATRI found that for verdicts above $1 mn, the median state court award was $3.6 mn, compared with $2.5 mn in federal court.
The Institute estimated that in 2022 alone, the trucking industry lost more than $102.8 mn in excess jury awards because eligible cases stayed in state court instead of moving to federal court. That is forum-shopping exposure, plain and ugly.
The federal minimum insurance requirement for interstate motor carriers hauling general freight is $750,000. Congress set that figure in the Motor Carrier Act of 1980 as part of deregulation.
The specific regulation was finalized in 1985. It has not been adjusted once in 45 years.
If the $750,000 minimum had tracked core inflation since 1985, it would stand near $2.2 mn today. Adjusted for medical costs and wrongful-death awards, it would sit around $3.7 mn.
FMCSA’s 2026 quadrennial filing shows the $750,000 minimum now covers less than 1.5% of the median nuclear verdict. After Montgomery, freight brokers have moved into that same liability weather with no federal bodily injury insurance floor at all.
