What is Freight Insurance and Why Do Shippers Need It?

If you have ever shipped goods, you must have heard about cases of freight loss or damage due to many different circumstances. With a reliable delivery service like GoShip, the transit of items is a safe and smooth process. Still, there are things that nobody can predict: natural disasters, hard weather conditions, etc.

What is freight insurance?

Freight insurance is the additional protection that covers your cargo in case of loss or damage. Cargo insurance keeps you calm and confident during the shipping process. If something happens to your freight, the insurer will reimburse its value so you don’t have to cover the expenses yourself. Freight insurance can be ordered from the shipping company or third-party insurers. Depending on your business needs, there are several types of freight shipping insurance.

What is the difference between freight insurance and freight liability?

Shippers often assume that freight insurance and freight liability are the same when actually, they’re not. Every booked shipment comes with limited liability coverage, and the word “limited” explains the main difference. The final amount of coverage is based on the commodity type and defined by the 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 the cargo is destructed due to their fault. To receive the maximum amount of carrier’s coverage liability, you have to prove your goods were packed properly and undamaged at the pick-up. Under the circumstances like bad weather conditions and natural disasters, the carrier is not completely liable for your freight.

With the insurance, you are safe no matter what happens to your freight. You also won’t have to prove the incident was the carrier’s fault. If your goods are shipped via freight insurance, you don’t need to 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. Typically, claims are paid within 30 days instead of several months. In the long run, getting freight insurance is a cost-effective solution. In addition, insurance agents will manage the paperwork for you.

When should I get freight insurance?

While booking a shipment and partnering with a certain carrier, try to figure out what is the maximum liability coverage for your commodities. If your freight value exceeds the stated amount, it is better to get insured. Also, cargo insurance is essential when:

  • You ship fragile goods. If your freight refers to the class of fragile items, it is more prone to get broken.
  • The cost of a product is very high. Often, such products require special handling and mentioning their size and weight details on insurance documents.
  • You don’t have time to wait for claim processing in the case of freight damage or loss. Claims filed in terms of freight insurance get paid within a month.

Important things to take care of

Even after getting the full-scale insurance, it is necessary to remember about freight delivery specifics. The better you organize the freight transportation, the lower the chances of damage are.

  • Make sure to provide proper packaging for your goods. This is the first step to avoid any damage. Whether they are fragile or require additional protection, ensure the safe conditions for transportation.
  • Giving accurate information about your freight is a necessity. It will save you time and money in case of cargo damage. Also, you’ll be able to compare your freight characteristics when filing a claim.
  • Take pictures of your freight before the transit. It is a good recommendation that can be helpful while reviewing the reasons and consequences of freight damage/loss.

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. GoShip cooperates with one of the most reliable cargo insurance providers, Falvey Insurance Group. Falvey will take care of your freight shipments’ safety and assist you with the required paperwork.

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