Freight liability vs. Freight insurance: What’s the difference?

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.


Liability coverage.

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. Also, if your item isn’t new from the manufacturer, the liability value per pound for used goods, with most common carriers, will be significantly less that the liability value per pound of new goods. When shipping, it’s important to know the carrier’s liability for freight loss and how much is covered under the existing liability coverage.


Liability claims.

The carrier liability and claims process for any cargo damage, loss, or theft from any cause shall be determined under the Carmack Amendment, a law created in 1935 to create uniform rules in regards to interstate shipping. 

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.


Freight insurance.

As mentioned above, in some cases, your freight shipment might have a higher value than what is covered under the included liability, especially when shipping used goods. This is where freight insurance comes in.

Freightquote offers additional insurance for purchase to cover the full value of the shipped goods. This extra insurance covers the shipped items and the cost of freight shipping.

Unlike the limited liability coverage, with added insurance, it covers more than just the carrier’s negligence.


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

If your freight 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


Our expert team can help you decide what is best for each of your freight shipments and offer cost-effective additional insurance. Contact us at 800.323.5441 so that each of your shipments is booked to meet the needs and value of your freight.

Get Free Quotes

Image Credit: