Freight Insurance vs Freight Liability: What’s the Difference?

No one ever wants to hear that their freight was damaged during the shipping process. Whenever you are shipping, you want to make sure that your shipment is prepared correctly to avoid possible damages during the shipment. When dealing with damages, it is important to know the coverage you might receive from a freight carrier and the difference between freight liability and freight insurance.

Freight Liability

There are many things you must prove to be compensated for your damaged freight. This can include:

  • The product was undamaged when it left the shippers location.
  • The product was not damaged by the received post-delivery.
  • The product was noted as damaged, shorted (only part of the product made it to the receiver) or the product arrived unreasonably late.

Once the shipper establishes one of these cases, it is the carrier’s job to show:

  • No negligence on their part.
  • The loss/damages were caused by:
  • An act of God
  • An act of the public enemy
  • An act of the shipper
  • An act of the public authority
  • An inherent flaw in the product itself

If the carrier is unable to prove that one of these requirements was not met, the shipper will receive compensation from the carrier up to the amount of liability they offer. Make sure that you know the amount of coverage the carrier you are using is entitled to for each shipment.

Freight Insurance

Freight insurance is almost always set up through a third party. Normally, you send the insurance company your freight information and you will receive a quote back informing you how much they will charge to cover the shipment. There are many different types of freight insurance options, so here are some helpful tips to help you along the process:

  • There is no such thing as total and complete coverage.
  • Make sure to read your policy very carefully. You don’t want to make a mistake and have your policy not cover what you needed it to.
  • Proving carrier negligence is not necessary for receiving compensation for damages or loss.
  • Remember – you will have to show proof of value and proof of loss.
  • Claims that are filed through insurance will usually be paid out within 30 days of submission.

Dealing with freight damages is very frustrating and sometimes unavoidable. Make sure you build a good relationship with the carrier that you choose for your shipment. For information about our claims process, click here.

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