Errors and Omissions

Looking for advice on this forumn is not the way to start a brokerage. Go to work for one for at least a year to learn the business and make mistakes on someone else's money. It is not as easy as you might think it is.

 

I'm not an expert in this category, but I have been studying up on it because I'm starting a brokerage of my own. Yes, I'm going to be an agent to get some experience first.

It's seems to me if a broker is purely just a broker and not controlling the carriers actions, has the properly worded contract and rate agreement, there is then zero liability on the broker? On the other hand if you cross the lines of who's on what base then certainly professional liability/Error & omissions will be needed.

Say a broker puts the wrong delivery time and it causes a financial hardship on the receiver, requires carrier check calls, dispatches carriers driver, select route for the driver to take, tell driver when to pulp and call if any variance. In the end do you have extensive requirements coupled with financial penalties. Either from "performance control" or just to cover yourself, I'd say it couldn't hurt.

If there was proper wording in a contract and proper performance of broker, is it needed, I wouldn't think so. There's a reason that brokers are not required to have insurance, they have zero liability, but through contracts they put liability on themselves, either from their own doing or a contract with a shipper.

The brokers insurance, a surety bond/trust fund.