What coverage does Alliance need to pay for damage to a trailer that was lent to them while transporting cargo?

The correct answer is trailer interchange coverage because this specific coverage is designed to protect the insured's liability for damage to trailers that are rented or borrowed from another party during the transport of goods. In the context of transporting cargo, if Alliance has been lent a trailer and is responsible for it, trailer interchange coverage provides financial protection for damages that may occur while that trailer is in their custody.

This coverage is particularly important in the trucking industry, where freight transport often involves the use of multiple vehicles and trailers that may not always be owned by the trucking company. It allows for versatility in operations without assuming the risk of high liability costs associated with damaged trailers.

The other options are not suited for this situation: a business auto policy typically covers owned vehicles, while a truckers policy primarily covers liability and cargo for trucks that the insured owns. An inland marine endorsement usually addresses specific types of property in transit but does not specifically cover borrowed trailers. Thus, trailer interchange coverage is uniquely positioned to meet the needs presented in this scenario.