Reefer Cargo Coverage

 

Reefer Cargo Coverage

Reefer hauling exposure is often assumed to be fully addressed by adding a reefer breakdown endorsement to the cargo policy. In practice, coverage depends on how the policy defines covered property, excluded commodities, and covered causes of loss.

When we’re placing cargo insurance for reefer haulers, the policy language matters more than anything else.

How Cargo Policies Define What’s Covered

Most cargo policies contain language like:

“We will pay for direct physical loss to covered property that you are legally liable for as a motor carrier, provided the loss is caused by a covered peril.”

Coverage depends on two threshold questions:

• Is the freight defined as covered property?
• Is the loss caused by a covered peril?

Temperature and Refrigeration Breakdown Are Excluded in the Base Form

Standard cargo forms typically exclude temperature-related losses. Policy language often states:

“We will not pay for loss caused by mechanical or electrical breakdown, failure of refrigeration equipment, or changes in temperature or humidity.”

Without a reefer breakdown endorsement, spoilage losses are generally excluded regardless of fault.

What Reefer Breakdown Endorsements Actually Mean

When added, reefer breakdown endorsements modify the above exclusion with language such as:

“We will pay for spoilage or change in temperature resulting directly from the sudden and accidental breakdown of refrigeration or heating units on an insured vehicle.”

This provides coverage only when the reefer breakdown is sudden, accidental, and properly documented. It does not create broad temperature coverage.

• Sudden means abrupt, not gradual
• Accidental means unintended and unexpected

What qualifies:

• Mechanical failure
• Electrical failure
• Compressor failure
• Internal component failure

What does not qualify:

• Gradual loss of cooling
• Poor maintenance
• Wear and tear
• Calibration drift
• Low refrigerant due to leaks not caused by a sudden event 

If the failure builds over time, the endorsement does not apply.

Most reefer breakdown endorsements impose duties such as:

• Maintaining temperature logs
• Keeping maintenance and inspection records
• Allowing inspection of the failed unit
• Preserving the equipment until examined 

Policy language often states that failure to provide these records voids coverage under the endorsement.

The Equipment

Reefer breakdown coverage applies to the reefer unit itself, not everything related to temperature control.

Commonly excluded:

• Fuel supply issues
• Driver error
• Unit being turned off
• Incorrect temperature settings
• External power interruption when parked 

Operational Conditions Also Apply

Reefer endorsements typically impose conditions, including language such as:

“Coverage is conditioned upon proper maintenance of refrigeration equipment in accordance with manufacturer specifications.”

“The insured must maintain maintenance records and temperature monitoring logs and provide them upon request.”

Failure to meet these conditions can void coverage even when the commodity itself is eligible.

Commodity Exclusions

Even with reefer breakdown coverage in place, most cargo policies have commodity-specific exclusions. Typical language includes:

“Covered property does not include commodities listed as excluded property in this policy.”

“Coverage does not apply to loss involving excluded commodities, regardless of cause.”

This means the type of freight being hauled controls the claim outcome before cause of loss is evaluated.

How Meat Is Commonly Treated

Meat products are frequently addressed in the commodity exclusions section of cargo policies. Depending on the carrier and endorsements, policies may:

• Exclude meat entirely
• Allow poultry but exclude beef or pork
• Exclude seafood or eggs
• Exclude swinging or hanging meat
• Boxed meat, frozen meat, and processed meat products
• Apply lower sublimits to certain meat products 

Packaging and Processing Do Not Change Classification

Cargo policies classify commodities by what they are, not how they are packaged or prepared.

Boxed meat, frozen meat, and processed meat products are still evaluated based on the underlying commodity definition. Packaging, freezing, or secondary processing does not override an exclusion.

If a product falls within an excluded commodity category, cargo / refrigeration breakdown coverage does not apply to that load.

Other Common Refrigerated Commodity Restrictions

Meat is not the only category affected. Reefer cargo policies often restrict or exclude:

• Pharmaceuticals and medical products
• Alcohol, tobacco, or controlled substances
• High-value food products subject to sublimits
• Goods requiring narrow temperature tolerances

A carrier can be approved as a reefer hauler and still have meaningful gaps depending on the freight being hauled.

Higher Limits and Excess Cargo Do Not Fix Exclusions

When shippers require higher limits, excess cargo coverage can be purchased.  This typically is needed when limits higher than $250,000 are needed.

While excess coverage increases the cargo limits, it does not broaden coverage.

Most excess cargo policies are written to follow form, meaning they use the same definitions, exclusions, and conditions as the underlying cargo policy.

That means:

• If the base policy excludes a commodity, excess cargo does too.
• If the base policy does not cover reefer breakdown, excess cargo does not add it.
• If the base policy pays nothing, excess cargo pays nothing.

 

Truck U Take

Reefer cargo coverage is determined by policy language, not equipment type. Commodity exclusions, including commodity related restrictions, remain in force even when reefer breakdown is added. Reviewing definitions before binding matters.

CTA

If you haul refrigerated freight and want your cargo policy reviewed against the actual commodities you move, call or text 254-294-7798 or email info@trucku.biz. We review cargo forms, endorsements, and exclusions before claims force the conversation.

Disclosure

This post is for educational purposes only. It is not legal advice, insurance advice, or a substitute for calling your agent. Truck U is good, but we are not psychic. Policies vary, laws change, and courtrooms get weird. Do not make decisions based solely on something you read on the internet unless it is from us, in writing, with your name on it.

All opinions are our own and do not represent the views of any carrier, employer, or underwriting department that occasionally wishes we were quieter on LinkedIn.