Freight Insurance & Liability: Staying Covered

 

Freight damage and loss are simply a part of shipping, and it will inevitably happen to you. A damaged or lost shipment can have a major impact on your business’s ability to meet your shipping needs, and the time spent managing lost freight can end up disrupting other parts of your supply chain and costing you even more money.

It’s vital to have insurance and liability to cover your assets and avoid a drain of your resources. Continue reading to learn more about how to stay covered, and if you’re in need of freight shipping, a shipping broker, or inventory management system for your business, contact ShipCarte today.

Freight Insurance vs. Freight Liability

Knowing the difference between freight insurance and freight liability is the first step in obtaining the type and amount of insurance you need to stay protected.

Freight Liability

With freight liability, your refund is limited, and in order to receive compensation, the carrier must be found liable for the loss or damage. In order to be found liable, you must be able to prove that the damage done was the result of the carrier’s negligence. This means that your freight must be properly packaged and a signed delivery receipt on file, proving that you properly prepared your freight for transport.

Every freight shipment is covered by some sort of liability coverage, which is determined by the carrier. This coverage is based on factors such as commodity type and freight class, and it covers up to a certain dollar amount of damage. Carrier liability may also include limitations, such as damage due to “acts of god” (weather) or acts of the shipper (improper packaging or loading), which relieves them of fault and the requirement of paying out the insurance costs. The carrier will always try to decrease their costs, so you should not rely solely on carrier liability to protect your shipment.

Freight Insurance

While freight liability requires you to prove that the carrier was at fault, freight insurance does not. It also tends to cover the entire value of the shipment. Because freight insurance is more comprehensive, it’s often a better way for small businesses to protect their freight against and damage that occurs during transit.

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