Freight insurance & liability: Staying covered as you enter the new year.

January 24, 2020

Many times, a damaged or lost shipment can have a major impact on a business’s ability to meet its freight objectives. This is especially true for small to medium-sized businesses (SMBs), as the time spent managing lost freight can end up disrupting other shipments and costing a considerable amount of money. This is why it is very important to understand what to do when your freight becomes damaged or lost. 

Additionally, having an understanding of what is covered by carrier liability and what is covered by freight insurance is crucial, as it will directly impact the outcome of the claim you make. From there, you can use this information to re-work your shipping objectives to account for the lost freight. 

Let’s take a look at how to approach a damaged or lost shipment.


What should you do when your freight becomes lost or damaged?

If you suspect that a shipment has been damaged or lost, the first thing you should do is determine the extent of the damage that occurred. As soon as the truck arrives, you should carefully inspect the freight and document any damages you find. The more documentation you have the better, so it is recommended that you take pictures if you’re able to. It’s important to also note the word “damaged” on the bill of lading to ensure the condition is known at the time of accepting the freight. It is also very important that you do not refuse the shipment or discard any damaged product or packaging as this may result in a denied claim or reduced payout.


Understanding what’s covered and what’s not.

To understand what is covered and what is not, you must understand the difference between carrier liability and freight insurance. Both are forms of liability coverage, however, with carrier liability, your refund is limited, has several exclusions and requires the carrier to be found liable for the loss or damage. Additionally, for a carrier to be found liable, you must be able to prove that the damage done was a result of carrier negligence. Along with this, the damaged or lost freight must have been properly packaged prior to the carrier picking it up, and there must be a signed delivery receipt on file.

Conversely, freight insurance does not require that you prove that the carrier was at fault, just that the damage or loss occurred during transit. In addition, freight insurance tends to cover the entire value of the shipment. Due to this, it is a better way for SMBs to protect against damage done while in transit.


When to make a claim and how long it will take to be resolved. 

Carriers will want to be notified of any claim as soon as possible. However, if the proof of delivery is noted, you have up to nine months from the date of delivery to file a claim. How long it will take for your claim to be resolved depends on whether or not it falls under carrier liability or freight insurance. 

If your claim is covered by freight insurance, it is typically resolved within 45 days. If your claim falls under carrier liability, it can take more time, as carriers have 30 days to acknowledge the claim, and then an additional 120 days to resolve the claim.


How Freightquote can help you stay covered in the new year.

Lost or damaged freight can have serious repercussions for SMBs due to having smaller logistical budgets than larger companies. For this reason, it is crucial that SMBs do everything in their power to reduce the probability of their shipments being lost or damaged. 

Partnering with Freightquote by C.H. Robinson can help considerably, as we work with over 76,000 vetted carriers who will assist you to increase the chance your freight is delivered intact and on time. In the event loss or damage does occur, we have a knowledgeable team to help direct and educate you throughout the claims process. We also have a powerful and easy to use online self-service tool that gives you the ability to fully manage every aspect of your shipment, from pick up to delivery. To begin scheduling your next shipment, click here and we’ll get you started.


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