Today, the Supreme Court told every freight broker in America that they can be sued for negligent carrier selection. Montgomery v. Caribe Transport II was unanimous. Nine to zero. The FAAAA preemption shield that the brokerage industry had relied on for decades is gone.
So…what’s next? Well, insurance of course. Anytime liability and exposure rear their heads, insurance becomes a necessity to protect the rest of society.
The only federal financial responsibility requirement for a freight broker in the United States is a $75,000 surety bond. That bond does not cover tort liability. It does not respond to a personal injury judgment. It does not pay out when a jury decides that a broker was negligent in selecting a carrier whose truck killed someone. It exists for one purpose only: to ensure that motor carriers and shippers get paid when a broker defaults on its freight payment obligations. Notice I said “United States” because many overseas brokers remain largely shielded from accountability.
Seventy-five thousand dollars. A surety bond. Against a legal landscape where the median nuclear verdict in trucking cases is $36 million and climbing.
The broker surety bond requirement lives in 49 U.S.C. Section 13906 and 49 CFR 387.307. MAP-21 set the current $75,000 floor in 2012, replacing the previous $10,000 requirement that had been in place since the Motor Carrier Act of 1980. FMCSA tightened enforcement of the bond requirement with a final rule that took full effect January 16, 2026, closing loopholes around BMC-85 trust funds that had allowed some brokers to operate with junk assets and no real liquidity.
Those reforms were necessary and overdue. Carriers had been getting burned for years by brokers who defaulted on payments while operating on paper-thin financial backing. The tighter bond enforcement protects carriers from non-payment. It does nothing to protect the public from the consequences of a broker’s negligent selection of a carrier.
The bond “shall ensure the financial responsibility of the broker by providing 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.” Contracts. Agreements. Arrangements. Payment obligations. Not tort liability. Not negligent hiring. Not the $36 million judgment a jury just handed down because the broker put a load on a carrier with a conditional safety rating and a driver who had not slept in 22 hours.
There is no federal requirement for a freight broker to carry bodily injury liability insurance. None. Not a dollar.
Some brokers carry contingent auto liability and contingent cargo insurance. I did when I brokered freight. Many of the larger operations do. These are policies that respond when a carrier’s own insurance is exhausted, disputed, or nonexistent, and the broker faces a claim arising from the carrier’s operations. Contingent auto, in particular, is the policy that would respond to a negligent-hiring claim post-Montgomery.
Contingent auto has never been a federal requirement. It has been a business decision. A risk management choice. Something the sophisticated brokers carried because they understood the exposure, and something the unsophisticated brokers skipped because nobody made them buy it and the FAAAA preemption defense meant they probably would never need it.
That calculation just changed. Permanently.
The brokers who already carry contingent auto and cargo coverage are sitting in a defensible position. They have a policy that responds. They have documentation that they took the exposure seriously. They can tell a jury that they not only vetted the carrier but also carried insurance against the possibility that their vetting was insufficient. That is a powerful litigation posture.
The brokers who do not carry those policies, and that is a lot of brokers, are now exposed in a way they have never been. They have $75,000 in surety bond coverage that does not respond to tort claims, no liability insurance, and a Supreme Court opinion that says state courts can hold them accountable for negligent carrier selection. The first time one of those brokers gets named in a catastrophic crash case, the math will become very clear very fast.
Here is why the insurance gap matters more now than ever. The American Transportation Research Institute published its updated trucking litigation analysis in late 2025. The findings should scare every broker, carrier, and insurer in the freight industry. Truck-tractor tort case filings grew at an average annual rate of 3.7 percent between 2014 and 2023. The median nuclear verdict, defined as a jury award exceeding $10 million, reached $36 million in 2022. That is approximately 50 percent higher than the median nuclear verdict in 2013. The share of verdicts exceeding $50 million increased by 6.4 percentage points over that same period.
The average trucking verdict between 2020 and 2023 was $27.5 million. Thermonuclear verdicts and awards exceeding $100 million have grown exponentially. In 2024, a St. Louis jury awarded $462 million against trailer manufacturer Wabash National in a fatal underride crash case, including $450 million in punitive damages. In 2021, a Florida jury returned a $1 billion verdict against a carrier in a fatal crash, the largest single trucking verdict in American history.
ATRI found that in more than 80 percent of verdicts exceeding $1 million, non-medical damages such as pain and suffering were up to 10 times higher than the actual medical bills. The average verdict above $1 million grew from $2.3 million in 2010 to $22.3 million in 2018. That is a 967 percent increase in eight years.
These are the numbers that now apply to freight brokers.
Geography matters enormously. ATRI’s report singles out California, Georgia, and Florida as the states with the highest median awards. Texas and Louisiana are consistently identified as nuclear verdict hotspots. The American Tort Reform Association has designated specific jurisdictions within these states as “judicial hellholes” where plaintiff-friendly procedural rules, expansive discovery, aggressive plaintiff’s bar tactics, and anti-corporate jury sentiment combine to produce outsized verdicts.
State courts are significantly more expensive for trucking defendants than federal courts. ATRI found that, for cases with verdicts over $1 million, the median award in state court was $3.6 million, compared with $2.5 million in federal court. The Institute estimated that in 2022 alone, the trucking industry lost upwards of $102.8 million in excess jury awards because eligible cases were not removed from state courts. That is pure forum-shopping exposure.
The FAIR Trucking Act, introduced in September 2025 by three Republican members of Congress, would give federal courts jurisdiction over large interstate trucking cases to reduce venue shopping. ATA has endorsed it. But the bill has not passed. Even if it does, it addresses where the case is heard, not how much insurance the broker must carry.
Two forces are converging on brokers simultaneously. The plaintiff’s bar is becoming more aggressive and more sophisticated in its approach to trucking cases. The reptile theory, third-party litigation funding, social inflation, and anti-corporate jury sentiment are all driving verdicts higher. And now, thanks to Montgomery, the defendant pool just expanded to include every freight broker who selected the carrier involved in a catastrophic crash.
The federal minimum insurance requirement for interstate motor carriers hauling general freight is $750,000. Congress set that number 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 the 45 years since.
If the $750,000 minimum had tracked core inflation since 1985, it would be approximately $2.2 million today. Adjusted for the actual increase in medical costs and wrongful-death awards, it would be roughly $3.7 million. FMCSA’s 2026 quadrennial filing shows that the $750,000 minimum now covers under 1.5 percent of the median nuclear verdict.
On April 9, 2026, Representatives Jesús García of Illinois and Derek Tran of California reintroduced the Fair Compensation for Truck Crash Victims Act, which would raise the carrier minimum from $750,000 to $5 million and index it to inflation going forward. This is the fourth time García has introduced this legislation. It has been endorsed by the Institute for Safer Trucking, the American Association for Justice, the Truck Safety Coalition, and several highway safety advocacy groups.
FMCSA has signaled it expects to publish a Notice of Proposed Rulemaking that would raise the minimum to $2 million or more. Some industry analysts expect the final number could reach $5 million for general freight. Implementation, if it happens, would come in late 2026 or 2027 at the earliest.
The carrier minimum debate has been running for over a decade. The Trucking Alliance, led by carriers like Knight Transportation and J.B. Hunt, favors an increase. ATA has generally opposed it, arguing that the current minimum still meets its intended purpose for the vast majority of claims. The Trucking Alliance’s counter is direct: if all crash settlements in the available data were covered by a $750,000 limit, 42 percent of the monetary exposure would represent an uninsured liability of the trucking company.
That is the carrier side. The broker side is worse. The carrier at least has $750,000. The broker has nothing. Zero federal liability insurance requirement.
Freight brokerage in the United States has historically been one of the easiest transportation businesses to enter. The total cost to become a licensed freight broker is under $2,000. You can arrange loads within three weeks of filing your application. The requirements are a BOC-3 process agent designation, a $75,000 surety bond (which costs roughly $938 per year in annual premium for a BMC-84 bond with good credit), and a completed OP-1 application. That is the federal barrier to entry for an industry that arranges approximately one-third of all freight shipped in the United States by more than 780,000 carriers.
There are roughly 28,000 licensed freight brokers in the United States. Many are sophisticated operations with robust carrier vetting processes, experienced compliance teams, and insurance portfolios that include contingent auto, contingent cargo, general liability, errors and omissions, and excess coverage. Many others are small operations, some run from a laptop and a cell phone, that have never purchased a contingent auto policy and would not know what one was if you asked them.
Post-Montgomery, both categories are equally exposed to state tort law for negligent carrier selection. The difference is that one category has insurance that responds and the other does not.
The conversation about broker insurance requirements has been theoretical for decades. Montgomery just made it urgent.
Congress should mandate minimum liability insurance for freight brokers. The surety bond serves its purpose for carrier payment protection. It is not and has never been a substitute for liability coverage. A broker who selects a carrier that causes a catastrophic crash should have a financial backstop to cover the resulting claim. That is not a radical proposition. It is the same principle behind the carrier insurance requirement that has existed since 1935.
What should the minimum be? Setting it at $750,000 to match the current carrier minimum is a starting point, but the carrier minimum itself is almost certainly going to be raised. A broker minimum that matches whatever the new carrier minimum becomes would create parity between the party that operates the truck and the party that selected the operator. If the carrier minimum goes to $2 million, the broker minimum should match it.
The insurance industry will need to develop products for this market. Contingent auto and contingent cargo policies exist, but they have been voluntary niche products. If broker liability insurance becomes mandatory, the market will need to scale those products to 28,000 brokerages of varying size, sophistication, and risk profile. Underwriters will need data on broker-carrier selection practices, and brokers with documented, data-driven vetting processes will receive better rates than those without any process at all. That is how it should work. The insurance market should reward brokers who take carrier selection seriously and penalize those who do not.
For brokers operating today, the action item is immediate. If you do not carry contingent auto liability insurance, call your insurance broker today. Not tomorrow. Today. The Montgomery opinion was published 48 hours ago. The plaintiff’s bar has been preparing for this moment for years. The first negligent-hiring suits against brokers will be filed within the next few weeks. If you are named in one of those suits without liability coverage, you will be defending a claim with a $75,000 surety bond that does not respond to tort liability and whatever personal or corporate assets you have.
That is not a defensible position. That is a business extinction event.
Montgomery v. Caribe Transport settled the preemption question. It did not settle the question of financial responsibility. The court said brokers can be sued. It did not say brokers are required to carry insurance that would pay the judgment. That gap between liability and financial responsibility is where the next crisis is building.
The carrier insurance minimum has been $750,000 since 1980 and it covers less than 1.5 percent of the median nuclear verdict. The broker insurance minimum is zero. The median trucking verdict is $36 million. The surety bond is $75,000 and it does not even respond to tort claims.
Something has to give. Either Congress mandates broker insurance, FMCSA includes brokers in the pending carrier insurance rulemaking, or the market eventually forces it through premium structures that make operating without coverage economically irrational. One way or another, the era of brokering freight with no financial responsibility for the consequences of your carrier selection is over. Montgomery told the industry that brokers owe a duty of care. The question that remains is whether they will be required to back that duty with real money.
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