CTB Carrier Selection & Risk Management 3 — Questions and Answers
Question 1: A carrier operating under a lease agreement with an owner-operator causes an accident. Under FMCSA regulations, who bears primary liability?
- The authorized carrier whose operating authority is being used (Correct answer)
- The owner-operator exclusively
- The broker who arranged the load
- The shipper who hired the broker
Correct answer: The authorized carrier whose operating authority is being used
Under 49 CFR Part 376, the authorized carrier (lessee) bears primary liability for accidents involving leased equipment because the carrier's authority covers the operation.
Question 2: Which of the following best describes 'double brokering' and its primary risk to a freight broker?
- A carrier re-tenders the load to another carrier without the broker's consent, creating unauthorized liability exposure (Correct answer)
- A broker uses two carriers to cover a single lane to improve capacity
- A shipper simultaneously contracts with two brokers for the same load
- A broker subcontracts dispatch functions to a third-party agent
Correct answer: A carrier re-tenders the load to another carrier without the broker's consent, creating unauthorized liability exposure
Double brokering occurs when a carrier passes the load to another carrier without authorization, voiding insurance coverage and exposing the originating broker to uninsured cargo claims.
Question 3: When evaluating a new carrier, which combination of resources provides the most comprehensive safety profile?
- FMCSA SAFER system, SMS BASICs, and carrier references (Correct answer)
- DOT number verification and motor carrier website review
- Carrier's self-reported accident history only
- Insurance certificate and equipment list
Correct answer: FMCSA SAFER system, SMS BASICs, and carrier references
Cross-referencing SAFER authority data, SMS BASIC scores for behavioral trends, and peer references gives a complete picture of the carrier's regulatory standing and operational reputation.
Question 4: A broker's carrier agreement should contain a clause requiring the carrier to name the broker as what on its cargo insurance policy?
- Additional insured or certificate holder (Correct answer)
- Primary beneficiary
- Named insured
- Loss payee
Correct answer: Additional insured or certificate holder
Requiring the broker to be listed as an additional insured or certificate holder ensures the broker receives notice of policy cancellations and can verify active coverage.
Question 5: Under 49 CFR Part 387, what is the minimum public liability insurance requirement for a for-hire carrier transporting non-hazardous general freight in vehicles over 10,001 lbs. GVWR?
- $750,000 (Correct answer)
- $1,000,000
- $5,000,000
- $300,000
Correct answer: $750,000
FMCSA requires a minimum of $750,000 in public liability coverage for non-hazardous general freight transported in vehicles weighing over 10,001 lbs. GVWR.
Question 6: What risk management tool allows a broker to quickly check whether a carrier's insurance is still active at the time of load tender?
- FMCSA's Licensing & Insurance (L&I) online query tool (Correct answer)
- The carrier's Certificate of Insurance PDF
- The broker's ELD system
- The load board carrier profile
Correct answer: FMCSA's Licensing & Insurance (L&I) online query tool
FMCSA's L&I tool reflects real-time insurance filings and is the authoritative source for confirming active coverage, unlike a static PDF certificate.
Question 7: A carrier that has been placed Out of Service (OOS) by a roadside inspector may continue operations under which circumstance?
- After correcting the cited violations and receiving clearance to return to service (Correct answer)
- If the carrier's safety rating is Satisfactory
- If the broker provides a written waiver
- After 24 hours have passed since the OOS order was issued
Correct answer: After correcting the cited violations and receiving clearance to return to service
An OOS order prohibits operation until the specific violations are corrected; only regulatory clearance — not a broker waiver or time lapse — lifts the restriction.
CTB Carrier Selection & Risk Management 3
A carrier operating under a lease agreement with an owner-operator causes an accident.
Under FMCSA regulations, who bears primary liability?