Supreme Court Ruling on Freight Brokers RaisesInsurance Concerns for Trucking Industry

Pressure is mounting on motor carriers after a unanimous US Supreme Court ruling found that
freight brokers are not shielded from certain personal injury lawsuits, a decision that could lead
brokers and carriers alike to face higher insurance costs.

In a May 14 decision, the nation’s highest court ruled in favor of Shawn Montgomery, allowing
him to pursue negligence claims against major logistics company C.H. Robinson. Montgomery
lost part of his leg after his parked vehicle was struck by a speeding truck driver in Illinois in
2017.

Industry experts said the ruling could expand liability exposure for freight brokers that arrange
trucking services. As a result, brokers may seek greater insurance protection and impose
stricter requirements on carriers, potentially increasing operating costs across the industry and
contributing to higher transportation rates.

Following the accident, Montgomery sued several parties, including C.H. Robinson. He alleged
that the freight broker was negligent in selecting the motor carrier involved in the crash, arguing
that the company knew or should have known that the carrier’s poor safety record posed a
significant risk to the public.

Lower courts dismissed Montgomery’s claims, ruling that they were preempted by the Federal
Aviation Administration Authorization Act (FAAAA), a federal law that limits states from enforcing
regulations that affect trucking prices, routes, or services. The courts also found that the law’s
safety exception did not apply.

However, the Supreme Court reversed those decisions, holding that negligent-hiring claims
against freight brokers fall within the FAAAA’s safety exception, which preserves state authority
over matters related to motor vehicle safety.

Montgomery’s position was backed by more than 24 states, which argued that allowing such
claims would promote accountability and improve safety standards throughout the freight
transportation industry.

The ruling is also expected to reignite debate over federal trucking insurance minimums, which
have remained largely unchanged for more than 37 years.

Under current regulations, motor carriers are generally required to maintain liability insurance
coverage ranging from $750,000 to $5 million, depending on the type of cargo being
transported.

Since 1985, Congress has repeatedly considered proposals to raise those minimum coverage
requirements or adjust them for inflation, but none have been enacted.

The Federal Motor Carrier Safety Administration (FMCSA) has previously suggested that
current minimum insurance levels may be insufficient to cover the costs of catastrophic crashes
and rising medical expenses. Industry groups, however, argue that most claims are resolved
within existing coverage limits and warn that higher insurance mandates would
disproportionately burden small and midsize carriers by increasing operating costs.