Transportation insurance is one of the most important yet least understood forms of business coverage. It protects companies that move goods or passengers against the financial risks that come with every trip, from damaged cargo and stolen shipments to accidents, environmental incidents, or lawsuits arising from road mishaps.
If you run a small courier service in Montréal, operate a mid-sized delivery fleet across Québec, or manage a long-haul logistics company serving both Canada and the United States, transportation insurance is not optional. It’s what allows you to recover quickly from accidents, protect your clients’ property, and keep your business running without major financial losses.
This guide explains everything you need to know about transportation insurance, what it covers, what liability limits apply, how premiums are calculated, and what steps you can take to reduce costs.
Why Transportation Insurance Matters
Every vehicle on the road represents both opportunity and risk. Deliveries can be delayed, cargo can be damaged by weather or theft, and collisions can cause expensive claims. Even a small incident like a van striking a pole or a refrigeration failure can cost thousands of dollars and strain cash flow.
Container Transportation insurance ensures that when accidents happen, your company doesn’t have to pay the full cost out of pocket. Instead, it shifts those risks to the insurer so your business can continue to operate with minimal interruption.
The livestock transportation coverage gives you confidence that you can:
- Replace or repair damaged cargo and vehicles after an accident.
- Protect your business from legal liability if one of your drivers causes injury or property damage.
- Maintain operations and client relationships by covering temporary replacements or rentals.
- Demonstrate reliability to clients, regulators, and lenders by showing proof of proper coverage.
Who Needs Transportation Insurance
Transportation insurance is required for any business that uses vehicles for commercial purposes, not just trucking companies. A personal car policy does not cover vehicles used for business activities, even if those trips seem minor.
You need commercial auto insurance if you:
- Deliver goods to clients, whether in a single van or an entire fleet.
- Use trucks or trailers to move your own products between locations.
- Transport passengers for a fee, such as taxis, shuttles, or charter buses.
- Haul cargo for others as a carrier or owner-operator.
- Lease or rent commercial vehicles for work.
Even small operations such as a florist delivering arrangements, a bakery supplying cafés, or a contractor transporting tools require proper commercial coverage to avoid claim denials.
Legal Requirements and Compliance
All commercial vehicle operators in Québec must maintain valid insurance coverage under the Automobile Insurance Act and the Commission des transports du Québec (CTQ) regulations. Proof of insurance is mandatory to obtain or renew an operating permit.
Operating without active insurance can lead to fines, licence suspension, or the revocation of your CTQ permit. Carriers transporting goods across provinces or internationally must also comply with federal and cross-border filing requirements, such as MCS-90 and BMC-91X certificates.
Read More - How Much Does Commercial Truck Insurance Cost?
Liability Limits and Endorsements
Liability limits determine how much your insurer will pay if you cause damage or injury. Although Québec law sets minimum requirements, many contracts and clients demand higher coverage. Endorsements called Standard Endorsement Forms (SEFs) modify a policy to fit specific business needs like leasing, renting, or using non-owned vehicles.
1. Light Commercial Vehicles (Under 4,500 kg GVWR)
Used by small trades, couriers, or passenger cars for business.
Minimum Required: $50,000 civil liability.
Recommended: $1 million to $2 million.
Common Endorsements:
SEF 6A: Extends coverage to vehicles owned by others but used for your business.
SEF 23A: Covers temporary substitute vehicles during repair periods.
SEF 27: Covers damage to non-owned autos in your care, custody, or control.
Example: A plumbing van accidentally damages a customer’s storefront. With $1 million liability and SEF 27, all repairs are fully covered, including damage caused by rented or borrowed vehicles.
2 Medium Trucks (4,500–11,793 kg GVWR)
Used for regional deliveries, moving services, and trades.
Minimum Required: $1 million.
Recommended: $2 million.
Common Endorsements: SEF 30 (Liability for Rental or Leasing), SEF 94 (Legal Liability for Hired Autos).
Example: A cube truck rented for a week damages a client’s property. SEF 94 ensures the insurer covers the claim even though the vehicle is leased.
3. Heavy Trucks and Tractor-Trailers (Over 11,793 kg GVWR)
Used for long-haul and cross-provincial transport.
Minimum Required: $1 million.
Recommended: $2–5 million.
Common Endorsements: SEF 5 (Permission to Rent/Lease), SEF 35 (Emergency Service Expense), SEF 99 (Restrictive Use for Long-Term Leases).
Example: A heavy hauler carrying construction machinery across Ontario requires $2 million liability to meet contract conditions.
4. Passenger Transport Vehicles
Minimum Required: $1 million for small vehicles; up to $5 million for buses.
Recommended: $2–5 million, depending on capacity and routes.
Example: A shuttle bus operating between Québec City and Montréal benefits from higher coverage to ensure all passenger claims are fully compensated.
5. Hazardous Cargo and TDG Compliance
Carriers transporting dangerous goods must meet Transport Canada’s Transportation of Dangerous Goods (TDG) standards, which classify nine hazard categories.
Minimum Required: $2 million.
Recommended: $5–10 million.
Example: A fuel tanker overturns, causing environmental damage. Cleanup and third-party claims reach $4 million, highlighting why elevated limits are essential.
6. Cross-Border Operations (MCS-90 and BMC-91X Filings)
U.S. operations require MCS-90 endorsements, proving the carrier can pay for third-party damages, and BMC-91X filings for multi-state coverage.
Federal Minimums: $750,000 for general freight, $1 million for petroleum, $5 million for hazardous goods.
Example: A Québec fleet hauling freight to Pennsylvania must maintain these filings to stay compliant and avoid penalties.
What Transportation Insurance Covers
A complete policy usually includes:
- Commercial Auto Liability: Covers injury and property damage to others.
- Physical Damage: Pays for the repair or replacement of your own vehicles after collision, fire, or theft.
- Motor Truck Cargo: Protects cargo you haul from loss or damage in transit.
- Refrigeration Breakdown: Covers spoilage of temperature-sensitive goods if cooling systems fail.
- Pollution Liability: Pays for environmental cleanup and restoration after spills or contamination.
- Freight Liability / Errors and Omissions: Covers misdelivery or administrative mistakes that cause loss.
- War/Terrorism Coverage: Optional for international shipments.
Example: A reefer truck delivering seafood experiences a refrigeration failure overnight. The spoilage is covered under its refrigeration breakdown endorsement, saving the company thousands in lost product costs.
Deductibles, Subrogation, and Exclusions
1. Deductibles
Most commercial policies include a deductible, the amount you pay before insurance applies. Typical deductibles range from $1,000 for light vehicles to $5,000 or more for heavy trucks. Higher deductibles reduce premiums but increase your upfront responsibility.
2. Subrogation
Subrogation means your insurer can recover costs from another at-fault party after paying your claim. This ensures fairness and helps control long-term premiums.
3. Common Exclusions
Even comprehensive policies have limits. Even comprehensive transportation insurance policies have certain exclusions and situations where coverage does not apply.
Understanding these helps you avoid claim surprises and manage risk responsibly. Most exclude:
- Intentional or criminal acts.
- Cargo damage due to poor maintenance or neglect.
- Unapproved routes or unauthorized drivers.
- Transporting illegal or unlisted goods.
- Ordinary wear and tear.
How the Claims Process Works
When an incident occurs, prompt and accurate reporting is critical.
- Notify Your Broker or Insurer Immediately: Provide full details of the event, including date, location, driver, and any injuries or police reports.
- Claim Assessment: The insurer assigns an adjuster to investigate the cause, estimate damages, and confirm coverage.
- Documentation: Supply invoices, photos, maintenance logs, and cargo manifests to support your claim.
- Repair or Settlement: Once validated, the insurer issues payment or authorizes repairs.
With Qubit Insurance, you don’t manage this alone. Their commercial claims team coordinates directly with adjusters, ensuring paperwork, timelines, and payments move quickly so your vehicles return to service without unnecessary downtime.
Why Choose Qubit Insurance
Qubit Insurance is a fully licensed, AMF-regulated brokerage that specializes in transportation and fleet insurance. Their team helps business owners across Québec manage risk, meet compliance requirements, and reduce operating costs.
Working with Qubit gives you:
- Expert guidance on CTQ filings, MCS-90, and BMC-91X documentation.
- Tailored coverage that matches your routes, fleet size, and type of cargo.
- Risk assessments and loss-prevention plans designed to reduce claims and downtime.
- Access to top Canadian insurers for the most competitive quotes available.
- End-to-end claims support, ensuring a faster and smoother resolution process.
Example: A Montréal logistics company partnered with Qubit to implement telematics and driver-training programs. Within a year, they lowered their loss ratio by 30% and saved 12% on renewal premiums, a clear example of how proactive risk management delivers results.
Get a No-Obligation Quote from Qubit Insurance
If your business relies on vehicles, having the right transportation insurance is essential. Whether you run a single delivery van or manage a large fleet across Québec and Ontario, Qubit Insurance can help you build a policy that fits your operations, cargo, and budget.
Visit www.qubitinsurance.ca or call +1-514-659-3151 to speak with a transportation insurance specialist today.
