What is Freight Insurance and Why Do I Need It?

what is freight insurance

If you have ever shipped goods, you must have heard about cases of freight loss or damage due to many different circumstances. With services like GoShip.com, shipping items is a safe and smooth process. However, there are things that nobody can predict: natural disasters, hard weather conditions, etc. That’s when freight insurance steps into the game.

Freight insurance is the additional protection that covers your cargo in case of loss or damage. Cargo insurance keeps you calm and confident about shipping because no matter what happens, the goods have protection. Shippers often assume that freight insurance and freight liability are the same when actually, they’re not.

What is the difference between freight insurance and freight liability?

Every booked shipment comes with limited liability coverage, and the word “limited” explains the main difference between freight liability and insurance. The final amount of coverage is based on the commodity type and defined by carrier’s tariffs. In most cases, it does not fully cover your shipment’s value, especially when it’s high.

Carriers can pay you the refund when it’s damaged because of their fault. To receive the maximum amount of carrier’s coverage liability, you have to prove your goods were packed properly and were undamaged at the pick-up. Other circumstances, like weather conditions and disasters, do not suggest the carrier is completely liable for your freight.

With the insurance, you are safe no matter what happens to your freight. You don’t have to prove it was the carrier’s fault, wait until your claim is processed or stress out about whether you will get a refund or not. Compared to liability coverage, freight insurance offers much more comfort for the shipper and lets you receive a refund faster.

In which case should I get freight insurance?

While booking a shipment and partnering with a certain carrier, figure out what is the maximum liability coverage for your commodities. If your freight’s value exceeds the stated amount, it is better to get insurance.

Also, cargo insurance is essential when:

  • You ship fragile goods
  • The cost of a product is very high
  • You don’t have time to wait for claim processing in the case of freight damage or loss

There are some important things you should take care of, even with insurance:

 

  • Make sure to provide proper packaging for your goods, for it is the first step to avoid damage.
  • Whether they are fragile or require additional protection, ensure the safe conditions for transportation.
  • Giving accurate and comprehensive information about your freight is necessary. It will save you time and money in case of cargo damage.
  • Take pictures of your freight before the transit. It is a good recommendation that can be helpful while reviewing reasons for freight damage/loss.

Final thoughts

Purchasing freight insurance is a smart decision and irreplaceable option for shippers who want to play it safe. Check with your shipping provider today to see what different options they have available for insuring your shipment.

Learn more about GoShip’s Freight Insurance!

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