A unanimous Supreme Court ruling this spring stripped freight brokers of a long-standing legal shield, and now one major insurance firm has responded by elevating its transportation practice to full division status. The move signals how seriously the industry views the erosion of federal preemption in negligent hiring claims.
Higginbotham announced the restructuring as carriers, brokers, and their underwriters recalibrate following *Montgomery v. Caribe Transport II*. The May 14 decision held that the Federal Aviation Administration Authorization Act does not block state lawsuits alleging brokers failed to vet unsafe motor carriers.
The new division brings together 31 professionals with 372 combined years of transportation insurance expertise. Division status grants the team broader authority to invest in specialized personnel, services, and industry programs, including a claims and loss prevention model staffed by people with direct transportation backgrounds.
The practice traces its roots to Memphis-based Lipscomb & Pitts, which joined Higginbotham in 2020. Brent Allred, a Chattanooga-based managing partner, assumed leadership in March 2021. Fourteen hires followed within ten months, more than doubling the team, which now spans the Southeast and Midwest.
“Transportation insurance is a highly specialized business,” said Rusty Reid, Higginbotham’s chairman and CEO. Claims environments, legal exposure, market conditions, and operational risks all diverge sharply from other coverage lines.
The Montgomery case involved a truck driver seriously injured when a stopped vehicle was struck by a Caribe Transport truck. The driver sued the freight broker that arranged the load, citing Caribe’s “conditional” federal safety rating. Deficiencies included driver qualification failures, hours-of-service violations, and elevated crash rates.
Justice Amy Coney Barrett wrote for the court that negligent hiring claims fall within the law’s safety exception because carrier selection directly affects which vehicles operate on public roads. However, the ruling left open whether preemption might still apply to loads moved entirely within a single state.
The consequences now ripple through the supply chain. Underwriters will start pricing carrier selection as a genuine exposure. Freight brokers may need contingent auto liability coverage with higher limits. Insurers will likely scrutinize whether brokers check safety ratings, verify insurance and operating authority, and document those checks.
Pressure will also shift downstream. Freight brokers may impose stricter safety and insurance requirements on motor carriers, potentially squeezing smaller operators already struggling with high auto liability costs. Shippers arranging their own transport could face similar questions about their selection procedures.
Brokers who help freight clients build a defensible, documented vetting process and pair it with appropriate contingent coverage will hold a clear advantage in keeping those accounts insurable at manageable rates. Higginbotham’s ReFuel Leadership Conference in Chattanooga on October 27 and 28 will feature the ruling as a central topic, including a panel with trucking association leaders from Tennessee, Georgia, and Alabama on cross-state coordination.
