What’s the difference between liability and insurance?

Handle with Care

In the unfortunate situation that your shipment is lost or damaged, it’s important to know what is covered by liability and what is covered by insurance.

Every booked freight shipment comes with limited liability coverage. The amount of coverage is determined by the carrier and based upon the commodity type. It covers a certain dollar amount per pound of freight.  In some situations, the included liability coverage may be less than the value of the shipped goods.

To make a liability claim, the carrier must be at fault for the damaged or lost freight. However, if the damage is from inadequate packaging, loading errors or weather-related causes, the carrier is not at fault. Additionally, if the damage is not noted on the delivery receipt, many carriers will deny any liability.

In some cases, your freight shipment might have a higher value than what is covered under the included liability.  Freightquote offers additional insurance that can be purchased to cover the full value of the shipped goods. This extra insurance covers the shipped items and the cost of freight shipping. It is redeemable under all types of loss with no proof of fault required. Unlike the limited liability coverage, with added insurance, there are no exclusions for packaging errors or severe weather.

How do these two types of insurances differ in the claims process?

If your shipment is only covered by liability:

  • Your claim must be filed within 9 months of delivery, or within a reasonable time frame if lost
  • If the deliver receipt is not noted as damaged some carriers require immediate notification
  • You must provide proof of value and proof of loss
  • The carrier has 30 days to acknowledge a claim and must respond within 120 days
  • You must prove carrier negligence
  • This means the freight was picked up in good order, packaged properly but delivered in a damaged condition

If your shipment is covered by additional insurance:

  • You will be required to provide proof of value and proof of loss
  • Claims are typically paid within 30 days
  • You are not required to prove carrier negligence

Freightquote’s expert team of Brokers can help you decide what is best for each of your shipments and provide cost-effective additional insurance.  Contact Freightquote at 800.323.5441 to speak with a Freight Broker to ensure each of your shipments is booked to meet the needs and value of your freight.


Insuring Freight Shipments with Freightquote

Many freight shippers ship with the misconception that their freight automatically has full insurance coverage. Unfortunately, this mistake is generally only discovered once the freight is damaged. By then though, it is too late to insure the shipment.

Because Freightquote is not the actual carrier and is, instead, the broker of a freight shipping relationship, Freightquote actually bears no liability for in-transit damage.  Freightquote.com’s expert customer service representatives are trained to assist customers who have damage claims to make.  But they can’t create coverage where none exists. Unless the shipper purchased freight insurance prior to shipping, the carrier is only liable for the maximum liability under the terms of the carrier’s General Rules Tariffs and shipping instructions.

It is important to note that the filing of a claim does not relieve the shipper for payment of freight charges. In fact, payment of the freight charges is necessary in order for a carrier to process a damage claim. Freightquote’s customer service reps do an excellent job of assisting in the resolution of freight claims, despite the fact that Freightquote has no responsibility or liability for the damage.

Depending on the carrier and the type of cargo damaged, the maximum liability of a freight carrier can be as low as only $0.10/lb – $0.50/lb. And to even collect that amount, the carrier will have to accept responsibility and agree to pay the claim.

Fortunately, the organized and thoughtful shipper can obtain relatively inexpensive freight insurance. Such coverage will ensure that damaged goods do not cost the shipper or the shipper’s customers any additional money. Additional freight insurance will almost certainly be the only way that the shipper will see full reimbursement in the event of damage.

Shippers concerned about appropriate coverage should speak with their Freightquote account representative prior to booking and scheduling a shipment.