9Insurance Business ReviewOCTOBER - NOVEMBER 2025Brokers are not required to carry bodily injury insurance. Their financial responsibility is limited to surety bonds for payment of freight charges -- a key distinction that plaintiffs' attorneys often try to blur in litigation.to liability even when they comply with federal registration and insurance requirements.These allegations are particularly dangerous in high-value cases involving death or serious injury -- cases in which plaintiffs seek to circumvent statutory limitations on liability.Statutory Framework and Federal RegistrationThe statutory definitions in 49 CFR § 371.2 distinguish brokers from motor carriers, while 49 U.S.C. §§ 13901­13906 outlines the registration and financial responsibility standards. Brokers must explicitly document the authority under which they act, per § 13901(c). Failure to do so may leave them vulnerable to a "co-carrier" classification.Importantly, brokers are not required to carry bodily injury insurance. Their financial responsibility is limited to surety bonds for payment of freight charges -- a key distinction that plaintiffs' attorneys often try to blur in litigation.Pending Legislation: Raising the StakesThe Fair Compensation for Truck Crash Victims Act (H.R. 6884) proposes raising the required minimum insurance for motor carriers from $750,000 to $5 million, indexed to medical inflation. While this increase targets motor carriers, not brokers, it may indirectly fuel litigation strategies that aim to attach liability to brokers -- especially in cases involving underinsured carriers.Concurrently, proposed legislation in both the House and Senate would create a uniform carrier selection standard. Brokers and shippers would be shielded from negligent selection claims if they verify carrier registration, insurance and safety compliance within 45 days of the shipment date. If enacted, this safe harbor would provide a powerful defense -- but for now, it remains a proposal.Federal Preemption: FAAAA to the ForefrontDefense counsel must understand the preemptive power of the Federal Aviation Administration Authorization Act (FAAAA), codified at 49 U.S.C. § 14501. It bars states from enforcing laws that impact a broker's prices, routes or services. Courts in the Fourth, Fifth, Sixth, Seventh and Eleventh Circuits have consistently held that negligence and negligent hiring claims against brokers fall within this preemption.Notably:· In Hamby v. Wilson (E.D. Tex. 2024), the court found negligent brokering claims were central to the broker's service and preempted.· In Mays v. Uber Freight (W.D.N.C. 2024), the court rejected application of the FAAAA's "safety exception," dismissing claims outright.· Only the Ninth Circuit (Miller v. C.H. Robinson, 2020) has held that tort claims may be saved by the safety exception -- creating a circuit split and continued litigation risk.Trial-Level Risks and Strategic ConsiderationsDespite favorable rulings on preemption at the appellate level, trial courts may still deny summary judgment where factual disputes exist -- particularly if the broker held dual authority or operated in a way that resembled a motor carrier. Defense counsel should be prepared to address operational records, communications and even indemnity contracts early in discovery.Additionally, as seen in Diamond Transportation v. Kroger (6th Cir. 2024), indemnity provisions can trigger significant exposure for brokers and upstream defendants. Timely tendering and assumption of defense obligations are critical.Looking Ahead: Technology, Fraud and TransparencyWith FMCSA's January 2026 compliance deadline approaching for updated broker registration systems, the agency is also moving to eliminate MC numbers in favor of USDOT numbers -- aimed at reducing fraud. At the same time, proposed broker transparency rules may soon require mandatory electronic recordkeeping and faster information sharing with shippers and carriers.Defense attorneys should also monitor developments related to fraud and identity theft in the broker-carrier relationship. A rise in impersonation schemes has led to increased complaints to FMCSA, with implications for liability and coverage.Key Takeaways for the Road AheadInsurance defense practitioners representing brokers must navigate a shifting matrix of federal regulation, preemption arguments, proposed statutory reforms and evolving trial court attitudes. Staying abreast of legislative activity and aggressively pursuing early dispositive motions based on federal preemption may be the most effective tools in limiting exposure. In the meantime, robust carrier vetting practices, contractual clarity and accurate documentation remain essential for minimizing risk.
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